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S&P 500 Slips as Yields Jump After Fed Signals Hikes Coming in 2023

Stock MarketsJun 16, 2021 03:34PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Wednesday amid sharp rise in U.S. bond yields after the Federal Reserve delivered a hawkish surprised, signaling two interest rates hikes by the end of 2023.   

The S&P 500 fell 0.61%, and the Dow Jones Industrial Average was down 0.59%, or 201 points, and the Nasdaq Composite was down 0.08%.

The Federal Reserve kept interest rates and monthly bond buying steady, though signaled that it could hike rates sooner than previously expected.

The Fed hiked its interest-rate outlook in 2023 to 0.6% from previous projections of 0.1% in March, signaling two 0.25% rate hikes in 2023, the Fed’s Summary of Economic Projections showed. The central bank also raised its economic growth and inflation forecasts. 

Treasury yields jumped sharply on the news as investors sold bonds in expectations of rising rates. 

Growth sectors of the market like tech, which typically boasts higher valuation that are unattractive in a rising rate environment, pared some of their post-Fed losses.    

Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL),  Amazon.com (NASDAQ:AMZN) and Facebook (NASDAQ:FB) were mixed. 

Oracle (NYSE:ORCL), meanwhile fell 5% after its softer second-quarter guidance offset first-quarter results that beat on both the top and bottom lines.

Cyclicals, which tend to move in tandem with an improving economy, were also lower, though financials were higher as bank stocks were boosted by rising rates.  

Energy stocks were lower as oil prices pared some of their recent gains, though remained close to October 2018 highs, as weekly U.S. crude stockpiles fell more than expected.

Crude oil inventories fell 7.355 million barrels last week, compared with analysts' expectations for a draw of 3.29 million barrels.

In other news, Roblox (NYSE:RBLX) slumped 7% on signs the reopening is denting demand for gaming. The video game platform reported 43 million daily active users for May, up 28% compared to a year earlier but down from 43.3 million in April.

S&P 500 Slips as Yields Jump After Fed Signals Hikes Coming in 2023
 

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Comments (24)
Steffen vdm
Steffen vdm Jun 16, 2021 11:59PM ET
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But hold on.... shouldn't these hikes be "priced in" as we speak? Just like all the other BS which has been priced in the last 12 months?
Czar Freeman
Czar Jun 16, 2021 9:39PM ET
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fed balance sheet is $8 trill now, with $1.4 trillion(120 bill/month) annual bond purchase target and inflation climbing now, let's see how long fed can hold up QE taper
bala ji
bala ji Jun 16, 2021 6:05PM ET
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reduce oil price automatically economy will grow. put an end to crude oil price so that all commodity price will be inserted control.
bala ji
bala ji Jun 16, 2021 6:05PM ET
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reduce petrol price control open0do not print? ore money. employ more people. this crisis will easily l go. have a watch on covid and eradicate it pl
Mario tragik
Mario tragik Jun 16, 2021 4:18PM ET
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in 2013 .... lol
JAMES CUNHA
JAMES CUNHA Jun 16, 2021 3:55PM ET
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Although vague, the Fed basically gave its timeframe for tapering when it stated that it intends to raise rates by the end of 2023.  It is a very clever nuance on the Fed's part.  Before raising rates, the Fed will certainly taper.
Jokers R Us
Jokers R Us Jun 16, 2021 3:52PM ET
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Its barely down, just another friday. Fed will never taper and wallstreet knows it.
Loraine Mae Gino
Loraine Mae Gino Jun 16, 2021 3:51PM ET
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Pen Fifteen Club
Pen Fifteen Club Jun 16, 2021 3:38PM ET
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Please pick a new photo other than this fuggo with the bubblegum and slobby face.  It discredits your entire "article".
Dave Jones
Dave Jones Jun 16, 2021 3:38PM ET
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slobby!!! Crack up!! LMAO!!🤣
Don Getty
Don Getty Jun 16, 2021 3:35PM ET
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what a crock - powell has always said 2023 - so this headline is fake news
Stan Smith
Stan Smith Jun 16, 2021 3:15PM ET
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Honestly they can never raise rates but they can kick the can. A false flag event  will shortly negate this lie of a rate hike..it can't and won't happen!
Jokers R Us
Jokers R Us Jun 16, 2021 3:15PM ET
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They will release another virus and shutdown the economy again in 2023.
Mark Jannetty
Mark Jannetty Jun 16, 2021 3:13PM ET
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or the next guy that has my job can raise rates, so I can write lots of books about how great I was for the stock market 🤔
Mark Jannetty
Mark Jannetty Jun 16, 2021 3:10PM ET
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long story short. your money will soon be worthless
Stephen Fa
Stephen Fa Jun 16, 2021 3:10PM ET
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fiat money, that is
James Andrews
James Andrews Jun 16, 2021 3:08PM ET
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Ridiculous, no news here. People are just desperate for direction rn.
Beqir Peci
Beqir Peci Jun 16, 2021 3:01PM ET
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Hello
Mark Manley
Mark Manley Jun 16, 2021 2:59PM ET
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Proof positive that the IQ of the average investor is WAY below 100
Joseph Colasanti
Joseph Colasanti Jun 16, 2021 2:55PM ET
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Are we really worried that they might start raising interest rates in 2023 instead of 2024.Its got to be me!!!!!
Jörg Holl
Jörg Holl Jun 16, 2021 2:54PM ET
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End of 2023 the FED propably has to fight deflation. If Cathie Wood is right, then that's the scenario to deal with.
Marina Kuperman
Marina Kuperman Jun 16, 2021 2:50PM ET
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Get ready people. Let's see what pro investor says about it.
Jacob Steinschlag
Jacob Steinschlag Jun 16, 2021 2:49PM ET
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2023? lol why not hike now and get it over with. Higher rates are normal and good for stocks anyways. Everybody just panicking for absolutely no reason.
fanny channel
fanny channel Jun 16, 2021 2:47PM ET
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good
Zen Cat
LittleZenCat Jun 16, 2021 2:46PM ET
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Rate hike, probably talking about 2 years into the future. Sell off seems quite counter-intuitive
Mario tragik
Mario tragik Jun 16, 2021 2:46PM ET
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just an excuse for big money to buy the dip. scaring the avg weak hands investor
Alexander Stinson
Alexander Stinson Jun 16, 2021 2:45PM ET
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bear market coming
Ric Later
riclater211 Jun 16, 2021 2:45PM ET
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good. everything is so overblown. we need 30% + retrace.
Mitchel Pioneer
Mitchel Pioneer Jun 16, 2021 2:23PM ET
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And the first cut-off of the head lower occurs precisely at 2PM.  What a flagrant, predictable joke.  How much of the loss will magically vanish "in late trade" today?  We all know savvy "investors" love buying into the close.
Jouni Matero
Jouni Matero Jun 16, 2021 2:23PM ET
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So true, happening right now, once again. It's obviously small retailers who has the billions to move indexes like that lol.
Mitchel Pioneer
Mitchel Pioneer Jun 16, 2021 1:45PM ET
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Toothpicks propping up the house of cards.
 
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