WALL Street stocks tumbled yesterday on resurgent concerns about higher interest rates, snapping a 13-day winning streak for the Dow.

The blue-chip index appeared poised to tie the all-time streak set in 1897. But after rising early in the day, equities headed lower in the afternoon as worries about more aggressive Federal Reserve actions took hold.

The catalyst was a rise in Treasury bond yields after US second-quarter gross domestic product growth exceeded expectations.

The Dow Jones Industrial Average, which had tied a 13-day streak last seen in 1987, finished down 0.7% at 35,282.72.

The broad-based S&P 500 shed 0.6% to 4,537.48, while the tech-rich Nasdaq Composite Index lost 0.6% at 14,050.11.

FHN Financial’s Chris Low said the jump in the yield on the 10-year US Treasury note above 4% reflected a rethink of Fed chair Jerome Powell’s commentary on Wednesday, when the US central bank lifted rates and kept alive the possibility of more hikes.

The market now thinks “the Fed funds interest rates are going to be higher for longer,” Low said.

Earlier yesterday, the European Central Bank lifted a key interest rate to its highest level since early 2001 while opening the door to pausing its aggressive rate hiking campaign.

Among individual companies, Meta rose 4.4% as it topped expectations with quarterly earnings of US$7.8 (RM34.6) billion, powered by a reviving digital ad business.

Others that rose after reports included Comcast, McDonald’s and Royal Caribbean Cruises.

But Southwest Airlines plunged 8.9% on concerns about a 12% jump in operating expenses, as the carrier forecast more spending in the fourth quarter. 

Others that fell after earnings were Honeywell International, Chipotle Mexican Grill and Mastercard. – AFP, July 28, 2023.