Investing.com - The S&P closed lower on Thursday as the Federal Reserve reaffirmed expectations for a December rate hike, while falling energy and tech also prompted investors to bail on stocks.
The Federal Reserve left interest rates on hold Thursday, but delivered an upbeat assessment of the economy and labor market, propping up the odds of a December rate hike, renewing concerns about the threat less risky U.S. government bonds pose to stocks.
The U.S. 10-year yields ticked higher to remain within touching distance of fresh 11-year highs. Rising Treasury yields tend to boost investor demand for bonds over stocks.
"We expect the current pattern of a hike a quarter to continue through Q1 of next year, before a slowdown in growth and still only moderate inflation allows the Fed to ease up on the pace of rate hikes later in 2019," CIBC said in a note following the Fed statement.
Ahead of the Fed's statement, sentiment on equities was rocked by weakness in energy stocks as U.S. oil prices extended losses to enter bear-market territory -- defined as a 20% decline from a recent peak.
Tech was also pressured by a fall in FAANG stocks, led by Facebook (NASDAQ:FB) as the social media giant reportedly is set to face deeper regulatory scrutiny in Europe over its European tax arrangements, Politico reported, citing two people close to the case. Its shares closed 2.4% lower.
A batch of downbeat corporate earnings also kept a lid on gains in the broader market.
Qualcomm (NASDAQ:QCOM) trimmed its December-quarter outlook on revenue following Apple's decision to use Intel (NASDAQ:INTC) chips in its new iPhones. DR Horton (NYSE:DHI) tumbled 9% after posting fiscal-fourth revenue that fell short of estimates and warning of slowing orders growth.
In corporate news, Tesla (NASDAQ:TSLA) rose 1% after Robyn Denholm was appointed as chairman, succeeding Elon Musk.
The appointment comes as Musk in August agreed to abandoned chairmanship after reaching a settlement with the Securities and Exchange Commission following a probe into the CEO's plans to take the company private.
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