Stocks fell Tuesday following its worst day since June as investors braced for a hawkish message from the Federal Reserve.
The Dow Jones Industrial Average dropped 154.02 points, or 0.47%, to 32,909.59. The S&P 500 fell 0.22% to 4,128.73, and the Nasdaq Composite dipped slightly 0.002% to 12,381.30. Both the Dow and the S&P 500 declined for a third straight session.
Real estate, health care and communication services were the worst performers in the S&P 500. Meanwhile, energy was the biggest winner in the broader market index, up 3.6% on the back of rising oil prices.
Zoom Video shares slumped 16.5% after the video conferencing company lowered its full-year forecast.
Traders are coming off a downbeat session, as a summer rally fizzled out amid mounting rate hike concerns, and as the 10-year Treasury yield climbed above 3%.
The Dow dropped more than 600 points Monday, while the S&P 500 and Nasdaq Composite fell more than 2% each. Those were the biggest one-day drops for the Dow and S&P 500 since June 16. The Nasdaq suffered its worst session since June 28.
“This bear in our view has one last act,” read a note from Lisa Shalett, head of the global investment committee at Morgan Stanley Wealth Management.
Shalett said investors are underestimating inflation, growing recession risks, and earnings expectations that will have to come down at some point.
