Stocks were seen falling on Thursday, extending losses this week, as bond yields rocketed to their highest level in several years following the Federal Reserve's plan to keep interest rates higher for longer.
The Dow Jones Industrial Average fell 187 points or 0.6%. The S&P 500 declined 0.7%, and the Nasdaq Composite fell 0.8%. The 10-year Treasury bond yield hit 4.48%, which was the highest in more than 15 years, with the latest driver being weekly jobless claims data that showed a still-strong labor market that could prompt the Fed to continue raising interest rates. Weekly jobless claims fell by 20,000 to 201,000 for the week ended Sept. 16, well below the 225,000 claims expected by economists cited by Dow Jones. This is the lowest number of new jobless claims since January.
The 2-year bond yield jumped to 5.19% after Thursday's jobs data, also the highest level seen since 2007.
The move extended losses after all three indices closed at session lows on Thursday. The Federal Reserve announced that it would keep interest rates on hold but predicted another rate hike before the end of the year. The central bank also indicated that it will cut rates less next year, essentially saying that it needs to keep interest rates at a higher level for a longer period of time due to still high inflation.
The chairman of the Fed, Jerome Powell, gave comments after the decision by emphasizing some obstacles and the ability to take action.
Technology stocks have been the loss leaders this week as investors rethink buying growth-oriented stocks if interest rates remain high. Tesla, Alphabet, Meta Platforms and Nvidia were among the lowers on Thursday.
Automated marketing company Klaviyo, which made its public market debut on Wednesday, fell 3% on Thursday. FedEx on the other hand bucked the negative trend, rising more than 6% after the delivery company reported adjusted earnings of $4.55 per share in its fiscal first quarter.
