November 29, 2023
Yesterday's post-Fed rally erased.

Stocks fell sharply in U.S. markets on Thursday morning, led by the technology and consumer discretionary sectors.

The Dow Jones Industrial Average fell by 1,100 points, or around 3.2 percent, in morning trading. The S&P 500 dropped 3.7 percent. The tech-heavy Nasdaq Composite plunged five percent. The Russell 2000 index of smaller companies fell 4.38 percent.

The declines in the major indexes were more than enough to erase Wednesday’s gains. Stocks soared after Federal Reserve chair Jerome Powell signaled that interest rate increases larger than 50 basis points were not being considered by Fed officials.

The Nasdaq’s decline is the worst since June of 2020.

All 11 sectors of the S&P 500 were down. The worst performing was consumer discretionary, which dropped 5.6 percent. Within the sector, automobile stocks were down 6.98 percent and internet and direct marketing stocks were down by 7.68. The information technology sector fell 4.7 percent and communication services declined by 4.3 percent.

Every stock on the Dow was in negative territory Thursday morning. The best performing was Coca-Cola, which was down by seven-tenths of a percentage point. The worst performing was Salesforce, off by seven percent.

The yield on the 10-year Treasury rose to 3.086 percent, topping three percent for the first time since 2018. The yield on the 5-year rose to 3.049 percent, also the highest since 2018. Yields move the opposite direction of prices, so a rising yield indicates investors putting a lower value on U.S. government bonds. That likely reflects the idea that inflation will remain strong and the Fed will have to raise rates aggressively.

Yields on Treasuries with terms shorter than 1 year fell, indicating a rise in their prices.