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.