Written by Yassin Ibrahim
Investing.com – The Dow tumbled on Thursday, dragged down by lower energy and technology stocks as the latter came under pressure from higher Treasury yields as investors rally longer for an interest rate hike by the Federal Reserve to quell inflation.
It fell 0.6% or 173 points, fell 1.4%, and fell 1.1%.
Microsoft (NASDAQ:) stock fell more than 2% to lead the decline in big tech as it continued to flirt with 15-year highs on bets on tighter Fed rate hikes after data earlier this week surprised the upside.
According to Investing.com, a 75 basis point rate hike next week is almost set. But the bullish inflation seen earlier this week and continued strength in the labor market may bet on higher interest rates longer.
Jeffreys said in a note that the upside surprise in inflation, “along with the recent improvement in growth momentum and increased demand for labor, has prompted us to revise our expectations for the Federal Reserve once again,” and predicted that the Fed would rise to its record rate. Rate up to 4.6%.
Better-than-expected data on Thursday showed that the labor market remained tight and consumer spending remained resilient.
Energy was also a huge drag on the broader market as oil prices fell more than 3% as energy demand concerns persisted after the International Energy Agency warned that oil demand is likely to dwindle in the last quarter of the year.
Devon Energy Corporation (NYSE:), Valero Energy NYSE: , Phillips 66 (NYSE:) was among the biggest losers in the sector, with the latter down more than 4%.
However, rail stocks were mostly higher, avoiding a broader market crash after the White House struck an initial deal between rail operators and their unions to avoid a rail strike that could disrupt food and fuel supplies.
Southern Norfolk (NYSE 🙂 and Union Pacific (NYSE:) was in the green, but CSX Corporation (NASDAQ:) was down more than 3%.
In the crypto-related news, it fell more than 5% after the long-awaited network upgrade or merger was completed.
After the upgrade, he moved from Proof of Working Consensus – the current mining-based approach to validated transactions on the Ethereum network – to a new Proof of Stake consensus.