The S&P 500 fell to a two-month low as Treasury yields continued to climb after the Federal Reserve raised interest rates.
The S&P 500 hit its lowest point since July when it closed at 3,749.35. The fed funds target rate was raised by 75 basis points, pushing the stock market down.
The stock market came under pressure again on Thursday as Treasury yields rose and investors worried about a Fed-caused recession. The yield on the 2-year Treasury rose to 4.1%, its highest level in 15 years. The yield on the 10-year Treasury leaped.
The US indexes were at their closing bell.
Bill Adams said in a note that Powell made clear that the Fed wants to see the job market cool off as it sees that as a way to prevent supply-demand dynamics from flowing through to inflation.
He said that it is possible that the unemployment rate could gently glide higher and that wages could cool. Historically, increases in the unemployment rate of the size that the Fed wants to see have coincided with a recession, meaning notable declines in employment, income, output and sales, spread widely across the economy.
According to the Fed's Summary of Economic Projections, policymakers think the unemployment rate will go up to 4.4% in 2023 from 3.8% this year.
The labor market remains strong despite the slight rise in weekly unemployment claims.
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Commodities and bonds are included.
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