The major U.S. stock indexes were unable to hold on to early gains on Wednesday, bouncing back and forth across the unchanged line before finishing in the red for the second straight session.
For the day, the Dow tumbled 339.82 points or 0.96 percent to finish at 35,028.65, while the NASDAQ dropped 166.64 points or 1.15 percent to close at 14,340.25 and the S&P 500 sank 44.35 points or 0.97 percent to end at 4.532.76.
The late slide on Wall Street came amid rising Treasury yields and worries over inflation and looming interest rate hikes after U.S. Treasury yields hit fresh two-year highs amid Fed rate hike expectations.
Most analysts believe a rate hike of at least 25 basis points from the FOMC is imminent, although some are now starting to think it may be a 50 bp boost.
The 10-year Treasury yield rose to 1.84%, continuing a sharp increase this year and pressuring the tech sector particularly hard.
That sent the NASDAQ into correction territory; the index is now 10% lower than its record closing high on Nov. 19.
In economic news, the Commerce Department said that U.S. homebuilding increased to a nine-month high in December amid a surge in multi-family housing projects.
Housing starts rose 1.4% to a seasonally adjusted annual rate of 1.702 million units last month, the highest level since March.
Crude oil prices continued their recent upward surge on Wednesday, rising for the fifth straight day to a fresh seven-year high.
Upward selling pressure was the result of a tightening market following supply issues in the Middle East – particularly the oil facility on Abu Dhabi.
West Texas Intermediate for February contract jumped $1.22 or 1.43 percent to $86.65 per barrel. It’s risen nearly $4 or almost 5 percent in the last week.
In overseas trading, stock markets across the Asia-Pacific region moved significantly lower during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 2.80 percent, while China’s Shanghai Composite Index slumped by 0.33 percent.
In contrast, the major European markets moved higher on the day. The U.K.’s FTSE 100 Index added 0.35 percent, while the German DAX Index and the French CAC 40 Index rose by 0.24 percent and 0.55 percent, respectively.
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