Markets Drop on Renewed Concerns About Rate Hikes

Table showing the performance of major U.S. financial indexes on March 28, 2023


Key Takeaways

  • Major U.S. equities indexes posted losses on March 28, 2023, with concerns reemerging about further interest rate hikes.
  • After trading higher earlier in the day, the Dow closed Tuesday's session lower, ending a three-day winning streak.
  • The yield on the two-year Treasury note ticked higher, moving above 4%.

U.S. equities fell as easing concerns about the health of the banking sector rekindled expectations that the Federal Reserve will continue to hike interest rates to fight inflation. The Dow had been higher most of the session but faded in the afternoon, snapping a three-day winning streak. The S&P 500 and Nasdaq spent the session in the red.

Bond yields rose, with the rate on the two-year Treasury note moving past 4%. That dragged down tech stocks, which are less attractive when borrowing costs rise. All the FAAMG stocks dropped. Shares of semiconductor firms, such as Advanced Micro Devices (AMD), Seagate Technology Holdings (STX), and Qualcomm (QCOM), lost ground.

Shares of American Express (AXP) led the Dow lower. First Republic Bank (FRC) and Charles Schwab (SCHW), two of the financial firms especially impacted by the recent banking turmoil, saw their shares sink. Health insurance company shares, including Humana (HUM), UnitedHealth Group (UNH), and Cigna (CI), declined. An analyst downgrade sent shares of Fox Corporation (FOXA) down.

Alibaba Split

Walgreens Boots Alliance (WBA) and McCormick & Company (MKC) beat profit and sales estimates, and their shares jumped. American Depositary Receipts (ADRs) of Alibaba (BABA) took off after the Chinese ecommerce giant announced that it would break up into six different units that could each have its own initial public offering (IPO).

Boeing (BA) shares advanced 2% as Canada said it is considering a potential $9 billion purchase of Boeing-made surveillance planes. Shares of Occidental Petroleum (OXY) gained after Warren Buffett's Berkshire Hathaway (BRK.A) increased its stake in the company. 

Oil and gold futures were up. The U.S. dollar slipped against the euro, pound, and yen. Major cryptocurrencies traded in the green.

Table showing the S&P 500 stocks with the biggest gains and losses on March 28, 2023


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