The jump in Treasury yields had a negative impact on growth stocks, leading to declines in companies like Tesla, Meta Platforms, Amazon.com, Alphabet, and Nvidia.
Broadcom’s decline and concerns about its partnership with Google regarding artificial intelligence chips contributed to a 3.7% drop in the company’s stock, affecting the Philadelphia chip index.
The consumer discretionary sector led a broad-based decline in the S&P 500 sector indexes, falling 2.2%.
The Federal Reserve signaled the possibility of another rate hike in 2023, which weighed on investor sentiment. The central bank’s updated projections indicated that the benchmark rate could peak in the range of 5.50% to 5.75%.
Unexpectedly falling U.S. jobless claims, a drop in existing home sales in August, and worse-than-expected results in the Philadelphia Fed’s business conditions index for September raised concerns about a potential recession.
The CBOE volatility index (VIX), often referred to as the “fear gauge,” reached its highest level in nearly a month, reflecting increasing investor anxiety.
Weak performances of recent IPOs after their initial highs dampened hopes of a revival in the IPO market, given high interest rates and broader market declines.
Some individual stocks, such as FedEx, saw positive movements after surprising investors with strong quarterly results, while others, like Klaviyo, Instacart, and Arm Holdings, experienced declines.