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Investing.com -- The Dow closed lower Wednesday, as surging Treasury yields put the squeeze on big tech after the Federal Reserve left interest rates unchanged, but leaned into higher-for-longer rate regime.
The Dow Jones Industrial Average fell 0.2%, 76 points, Nasdaq fell 1.5%, and the S&P 500 fell 0.9%.
The Federal Reserve kept rates steady on Wednesday, and kept its forecast for one more rate hike this year, but signaled a higher-for-longer rate regime by reining in the number of rate cuts for next year.
"The bottom-line is that the Fed is embracing the 'higher for longer' approach to getting inflation down to target," Jefferies said in a note.
Powell attributed the more hawkish path to recent strength in the economy that threatens to boost inflation.
"The stronger economic activity means that we have to do more with rates," Powell said, addressing a question on why the Fed reduced the number of rate cuts for next year.
Treasury yields including the 2-Year and 10-Year yields cut intraday losses and surged to close at fresh cycle highs after the Fed decision.
The 2-year Treasury yield, which is more sensitive to interest rate decisions, closed at 5.120%, the highest level since 2006, after falling to a low of 5.049% on the day.
Growth sectors of the marketing including big tech came under pressure from rising Treasury yields, paced by a more than 3% in Alphabet (NASDAQ:GOOGL).
Meta Platforms (NASDAQ:META) and Apple (NASDAQ:AAPL) fell 1%.
Instacart ( Maplebear Inc.) (NASDAQ:CART) fell more than 10% to end the day just above its IPO price of $30.
The online grocery delivery platform made its stock market debut on Tuesday, rising as much as 40% on initial trading before ending the day up 12%.
The wobble in the stock comes just as analysts at Needham started coverage on the stock with a hold rating, citing rising competition and slowing online grocery sales.
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