- U.S. equities indexes plunged on March 7 after Fed Chair Jerome Powell signaled that the central bank would remain aggressive in raising interest rates to fight inflation.
- The Dow had the worst session among the major indexes, down more than 1.7% on Tuesday, while the Nasdaq and the S&P 500 also closed more than 1% lower.
- DICK's Sporting Goods (DKS) shares jumped to an all-time high on strong results and guidance along with a dividend boost.
U.S. equities plunged as Fed Chair Jerome Powell suggested interest rates may need to go up faster and higher than expected in order to bring down inflation. Powell's comments to Congress sent the Dow, S&P 500, and Nasdaq down more than 1%, and drove the yield on the two-year Treasury note up above 5% for the first time since 2007.
It was a broad-based selloff, with almost every stock in the Dow finishing in the red. Bank stocks tumbled, with shares of Goldman Sachs (GS) and JPMorgan Chase (JPM) losing 3%. Smaller banks were especially hard hit, dominating the list of worst-performing stocks in the S&P 500. Shares of SVB Financial Group (SIVB), Signature Bank (SBNY), First Republic Bank (FRC), M&T Bank (MTB), Fifth Third Bank (FITB), and Citizens Financial Group (CFG) sank 5%.
Tech stocks, which are less attractive when borrowing costs increase, were lower. Shares of Apple (AAPL), Cisco Systems (CSCO), and Microsoft (MSFT) dropped 1%. Tesla (TSLA) shares declined 3%, and shares of rival electric vehicle (EV) maker Rivian Automotive (RIVN) cratered 14% after the company announced that it would sell bonds in order to raise $1.3 billion.
The impact of Powell's testimony rippled through the commodities market, with oil, gold, and copper futures sinking. Chevron (CVX), Newmont Corporation (NEM), and Freeport-McMoran (FCX) were among the firms in those sectors whose shares lost ground.
DICK's Shares Set a Record
DICK's Sporting Goods (DKS) shares hit an all-time high after the sporting goods retailer reported better-than-expected results and guidance, and boosted its dividend. Airlines stocks flew higher, although shares of JetBlue Airways (JBLU) nosedived after the Department of Justice said that it would seek to block the carrier's acquisition of Spirit Airlines (SAVE). Merck (MRK) was the only stock in the Dow to finish higher following big gains the previous day on positive results from trials for two of its cardiovascular drugs.
The U.S. dollar advanced against the euro, pound, and yen. Prices for most major cryptocurrencies fell.