Markets Drop for 3rd Day as Powell Sees More Rate Hikes

U.S. equities fell for a third-straight session after Federal Reserve Chair Jerome Powell testified before a House committee that he anticipates further Fed interest rate hikes this year because the fight against inflation is far from over. 

Tech stocks, which are especially sensitive to rising borrowing costs, were the biggest drag on the market.  Intel (INTC) and Advanced Micro Devices (AMD) were the worst-performing stocks in the S&P 500, and shares of others in the artificial intelligence (AI) sector, including Nvidia (NVDA) and Qualcomm (QCOM), tumbled. Shares of Salesforce (CRM) and Netflix (NFLX) slipped, as did those of all the FAAMG stocks. Tesla (TSLA) shares lost 5% on a downgrade from Barclays.

FedEx (FDX) shares dropped as the package delivery giant’s quarterly sales came in short of estimates. Shares of Teleflex (TFX) declined following an analyst downgrade. 

Generac Holdings (GNRC) shares took off for a second straight day as demand for generators soared because of blackouts and soaring temperatures in the Southern U.S. Dollar Tree (DLTR) shares jumped as executives gave details of a turnaround plan for the discount retailer. Oil futures rose 2%, boosting shares of Exxon Mobil (XOM), APA (APA), ConocoPhillips (COP), and rival crude producers, as well as oilfield services providers Baker Hughes (BKR), Halliburton (HAL), and SLB (SLB). Shares of big construction equipment providers Deere & Co. (DE) and United Rentals (URI) advanced. 

Prices for gold and other precious and industrial metals fell, with copper being the exception, adding half a percent. The yield on the 10-year Treasury note initially moved higher on Powell’s comments, then lost ground and ended little changed. The U.S. dollar rose versus the yen, but was lower against the euro and pound. It was a good day for cryptocurrency bulls, as prices for most major digital coins posted strong gains.