The S&P 500 slid Thursday as traders fretted over a continued rise in interest rates.
The broad market index fell 0.5%, while the Nasdaq Composite dropped 0.8%. The Dow Jones Industrial Average bucked the trend, eking out a 53-point gain as Salesforce shares popped on a strong quarter and forward guidance.
“The market’s reacting to stronger economic data, and data that is not confirming the correction in inflation,” said Gibson Smith, chief investment officer at Smith Capital Investors. “It’s glaringly clear for equities that we could be an environment where growth is not coming in as high as we would like, and inflation is not coming down as fast as we would like, so the higher rates are starting to split the equity market.”
Rates pressed higher Thursday, with the benchmark 10-year note yield trading above 4%. The 2-year note yield reached levels not seen in more than a decade.
A surge in labor costs and a pullback in jobless claims reported early Thursday point to the likelihood that the Fed will raise its benchmark interest rate another 0.25 percentage point later this month.
Wall Street is coming off a mixed session, with the S&P 500 and Nasdaq Composite falling Wednesday, while the Dow posted a small gain. The S&P 500 and the Nasdaq are on pace for their second consecutive losing week for the first time since December. The Dow, meanwhile, is on track for its fifth consecutive negative week, a first since May 2022.
The rise in bond yields and concerns of a potentially larger-than-expected hike from the Federal Reserve have fueled investor concern in recent days, putting a dent in the early 2023 rally.
In corporate earnings, Salesforce and Okta shares jumped in overnight trading on strong results and guidance. Silvergate Capital, meanwhile, shares plunged more than 40%, after the company delayed its 10-K annual report.
Tesla shares, popular with retail investors, lost 5% after the company failed to unveil details of any next-generation vehicles during its…
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