Stocks tumbled on Tuesday as the sell-off on Wall Street mounted and investors braced for another large rate hike due out Wednesday from the Federal Reserve.
The Dow Jones Industrial Average shed 313.45 points, or 1.01%, to settle at 30,706.23. The S&P 500 slid 1.13% to 3,855.93 and the Nasdaq Composite slumped 0.95% to 11,425.05.
The Federal Open Markets Committee began its two-day policy meeting on Tuesday, where central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have slumped in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.
Rates marched higher as equities fell, with the yield on the 2-year Treasury note notching a fresh high dating back to late 2007. The yield on the 10-year Treasury reached 3.593% — levels not seen since 2011.
The move higher in the 10-year is likely contributing to the turmoil in equity markets on Tuesday, said Cresset Capital’s Jack Ablin.
“Investors have pretty well digested the 75 basis point hike tomorrow but perhaps there’s some concern that the rhetoric at the press conference could be still extremely hawkish,” he said.
Traders are keeping an eye on the central bank’s projections coming out of the meeting in an attempt to gauge how much further interest rates may rise and what that means for the economy.
Meanwhile, Ford shares slumped after announcing that supply chain issues would cost an extra $1 billion in the third quarter.
In other economic news, housing market data released Tuesday showed an unexpected jump in starts for August, although building permits saw the biggest decline since April 2020.
Tuesday’s moves followed a choppy trading session that saw stocks rise in the afternoon and snap a two-day losing streak.
This article was originally published on NBCNews.com