Wall St moves lower as Fed presses on against inflation

NEW YORK, Nov 3, (AP): Stocks fell broadly on Wall Street Thursday and Treasury yields are again bumping up against multiyear highs a day after the Federal Reserve indicated that its fight against inflation is far from over.

The S&P 500 fell 0.9% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average fell 120 points, or 0.4%, to 32,025 and the Nasdaq fell 1.5%.

Technology stocks were among the biggest weights on the market. Apple fell 2.8%.

The yield on the 10-year Treasury rose to 4.16% from 4.09% late Wednesday. Bond yields are hovering around multiyear highs as the Fed raises interest rates. That has prompted mortgage rates to more than double this year and it continues putting pressure on stocks.

The Fed on Wednesday added another jumbo rate increase and suggested that the pace of rate hikes may slow. The central bank also indicated that interest rates might need to ultimately go even higher than previously thought in order to tame the worst inflation in decades.

The central bank’s latest three-quarters of a percentage point raise brings short-term interest rates to a range of 3.75% to 4%, its highest level in 15 years. Wall Street is evenly split on whether the central bank ultimately raises rates to a range of 5% to 5.25% or 5.25% to 5.50% next year.

Higher rates not only slow the economy by discouraging borrowing, they also make stocks look less appealing compared to lower-risk assets like bonds and CDs.

Stubbornly hot inflation has been prompting central banks around the world to also raise interest rates. On Thursday, the Bank of England announced its biggest interest rate increase in three decades. The increase is the Bank of England’s eighth in a row and the biggest since 1992.

European and Asian markets were lower.

Europe

In midday trading, the FTSE 100 in London lost 0.7%, the DAX in Frankfurt declined 1% and the CAC 40 in Paris sank 0.7%.

Asia

In Asia, the Hang Seng in Hong Kong fell 3.1% to 15,369.72, giving up much of the previous day’s gains after the Chinese government failed to confirm a rumor on social media that Beijing might start easing anti-virus controls that have disrupted business.

The Shanghai Composite Index fell 0.2% to 2,997.80 and Sydney’s S&P-ASX 200 sank 1.8% to 6,857.90. Japanese markets were closed for a holiday.

Kospi in Seoul rose 0.3% to 2,329.17. India’s Sensex lost 0.4% to 60,692.09. New Zealand and most Southeast Asian markets also fell.

Oil

In energy markets, benchmark U.S. crude lost $1.40 to $88.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.63 to $90 on Wednesday. Brent crude, the price basis for international oil trading, shed $1.29 to $94.87 per barrel in London. It rose $1.51 the previous session to $96.16 a barrel.

Currencies

The dollar gained to 148.29 yen from Wednesday’s 146.94 yen. The euro declined to 97.38 cents from 98.83 cents.