Dow loses nearly 300 points as fears of further Fed rate hike hit stocks: live updates

Stocks sold off on Wednesday, continuing a slow start to September, as concerns mounted that the Federal Reserve might not finish raising interest rates.

He Dow Jones Industrial Average it sank 270 points, or 0.8%. He S&P 500 fell 1%, while the Nasdaq Composite lost 1.3%.

Treasury yields jumped, weighing on risky assets again. The 2-year Treasury yield rose more than 6 basis points for trading above the 5% level.

Pressured by rates, technology stocks underperformed. The biggest laggards include NVIDIA and teslafalling more than 3% each. Apple it fell about 3%, weighing on the Dow Jones. amgen and boeing contributed to the losses, falling more than 1% each.

Wednesday’s rise in Treasury yields coincided with better-than-expected economic data that fueled some concern about the likelihood of further hikes. Recent readings on the service and manufacturing sectors of the US economy show that prices are moving in the wrong direction.

“The ISM reinforced all the concerns that have been plaguing stocks for weeks: higher yields undermine stock valuations, robust growth (and) persistent inflation keep pressure on the Fed, healthy growth gives a new bet on oil,” Vital Knowledge’s Adam Crisafulli said in a note on Wednesday.

The price component of the ISM services index increased 2.1 percentage points to 58.9% in August, representing the share of companies reporting increases and a four-month high.

This follows the price component of the ISM manufacturing index which jumped 5.8 points to 48.4%. While readings below 50% represent a contraction in the ISM survey, the big one-month jump is a reversal of the recent trend. The prices paid component rose slightly more than expected, further fueling fears of rate hikes.

Following the services report, the likelihood of the Federal Reserve raising interest rates in November increased. last at 49% according to CME Group. Traders are pricing in a 91% chance that the central bank will hold rates steady at its meeting later this month.

“Even though we keep hearing that we’re probably going to be in a slump and not a recession, the more negative news we get about the economy, the more I think people worry that we could actually go into a recession,” he said. Sam Stovall, chief investment strategist at CFRA Research.

Hours earlier, the president of the Boston Federal Reserve, Susan Collins, said the central bank it can “proceed with caution” on further rate hikes, but said “further tightening would be warranted” depending on the data.

Oil prices rose again on Wednesday after reaching their highest level since November. Saudi Arabia and Russia extended their voluntary supply cuts.

— CNBC’s Jeff Cox contributed to the report.