NEW YORK (AP) — Stocks fell in morning trading on Wall Street Wednesday as sharp drops in crude oil prices pulled energy companies lower.
The S&P 500 fell 0.4% as of 10:07 a.m. Eastern. The Dow Jones Industrial Average fell 191 points, or 0.6%, to 30,344 and the Nasdaq rose 0.1%.
U.S. crude oil prices slumped 6.1% and weighed heavily on energy companies. Chevron fell 4.4%.
Bond yields fell sharply. The yield on the 10-year Treasury fell to 3.14% from 3.30% late Tuesday. That weighed down bank stocks, which rely on higher yields to charge more lucrative interest on loans. Citigroup fell 1%.
Industrial and technology stocks also fell broadly. Markets in Europe and Asia also fell.
The weak start follows a solid rally on Tuesday in what has been a turbulent period for the broader market, with daily and sometimes hourly swings from sharp gains to losses. Much of that has been tied to concerns about rising inflation and the Federal Reserve’s plan to aggressively raise interest rates in order to temper inflation’s impact on consumers and businesses.
Federal Reserve Chair Jerome Powell underscored the Fed’s determination to raise interest rates high enough to slow inflation, a commitment that has fanned concerns that the central bank’s fight against surging prices could tip the economy into recession. Powell is addressing Congress this week, starting with the Senate Banking Committee on Wednesday.
Powell’s testimony comes a week after the Fed raised its benchmark interest rate by three quarters of a percentage point, its biggest hike in nearly three decades. With inflation worsening, the Fed’s policymakers also forecast a more accelerated pace of rate hikes this year and next than they had predicted three months ago, with its key rate reaching 3.8% by the end of 2023. That would be its highest level in 15 years.
The Fed’s moves are happening as some discouraging signals have emerged about the economy, including sagging spending at retailers and soured consumer sentiment. The worries over inflation and interest rates have been worsened by a spike in energy and other key commodity prices following Russia’s invasion of Ukraine.