S&P 500 slips as Treasury yields take flight on fears of further Fed tightening
Investing.com — The S&P 500 fell Wednesday, pressured by a surge in Treasury yields as the Federal Reserve’s July meeting minutes stoked concerns that rate hikes remain in play for later this year.
The S&P 500 fell 0.6%, the Dow Jones Industrial Average fell 0.4%, or 151 points, and Nasdaq fell 0.9%.
Most Federal Reserve officials said «significant» upside risks to inflation keep further monetary policy tightening on the table for later this year, according to the minutes from the July 25-26 Federal Open Market Committee meeting published Wednesday.
The minutes also revealed a Fed U-turn on the outlook for the economy, with Fed staff no longer expecting a “mild” recession later this year.
The hawkish overtones gave credence to bets for higher for longer rates, pushing Treasury yields to fresh October highs.
Tech led the broader market to the downside as chip stocks took a breather from the recent melt-up amid pressure from Intel Corporation (NASDAQ:INTC), Coherent Inc (NYSE:COHR), and Advanced Micro Devices Inc (NASDAQ:AMD).
Intel fell more than 1% after walking away from plans to acquire Tower Semiconductor (NASDAQ:TSEM) as the chipmaker failed to secure regulatory backing for the deal in time. Intel will pay a break-up fee of $353 million for backing out of the deal.
Coherent Inc (NYSE:COHR), meanwhile, slumped more than 30% after reporting an unexpected Q4 loss and delivering weaker than expected guidance.
Target Corporation (NYSE:TGT) reported second-quarter revenue that fell short of Wall Street estimates and the retailer cut its annual guidance, but the stock rose more than 1% as investors cheered signs of leaner inventory levels and improved margins.
TJX Companies Inc (NYSE:TJX) climbed 4% after lifting its
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