Finance

Stock market news live updates: Stocks drop, tech shares sink after Fed minutes hint at earlier liftoff on interest rates: Nasdaq slides by 3.3%

Shares were sold off Wednesday afternoon, with tech stocks accelerating the decline as the market closed as investors digested the minutes of the Federal Reserve’s latest meeting suggesting a potentially faster path toward raising interest rates.

The Nasdaq Composite fell nearly 3.3% on its worst day since February 2021 as the rout in technology stocks deepened. The S&P 500 fell about 2%, as the rate-sensitive real estate sector underperformed along with IT and telecoms stocks. The Dow is down nearly 400 points, or more than 1%.

Investors looked to the minutes of the Federal Open Market Committee (FOMC) meeting in December, which indicated that the central bank was considering a quicker removal of its monetary policy adjustment than previously expected. Policy makers suggested that on the back of a strong economic recovery and rising inflation, interest rates could rise sooner than expected. Some policymakers also telegraphed that they would choose to shrink the Fed’s balance sheet shortly thereafter.

“Participants generally noted that, given their individual expectations for the economy, labor market and inflation, an increase in the fed funds rate may be warranted sooner or at a faster pace than participants had previously anticipated,” the minutes said. “Some participants also indicated that it may be appropriate to start reducing the size of the Federal Reserve’s balance sheet relatively soon after starting to raise the federal funds rate.”

Treasury yields jumped to build on gains after rising sharply on Monday and Tuesday, adding to pressure on technology and growth stocks that are highly valued for potential future earnings. The benchmark 10-year index jumped to a 9-month high of more than 1.7% after the release of the minutes of the Federal Reserve’s meeting Wednesday afternoon.

“The minutes further confirm the Federal Reserve’s recent bullish turn and its desire to begin removing monetary easing this year,” Lawrence Gillum, fixed income strategist for LPL Financial, said in an email Wednesday morning. While most of the information was known, “some” members wanted to start reducing the Fed’s $8.5 trillion balance sheet soon after the first rate hike would likely come under more scrutiny at upcoming meetings.

“It appears that the Fed wants to move faster than it has in the past and that yields, across the curve, are moving upwards with the prospects of a faster schedule tightening,” Gillum added.

Earlier Wednesday morning, investors also digested the new upbeat economic data, as private payroll gains easily beat estimates for December. The ADP said on Wednesday that private sector employers added 807,000 jobs during the last month of November, nearly doubling expectations as job growth rebounded to help ease some of the labor shortage.

4:02 p.m. ET: Stocks drop, tech stocks fall after Fed minutes hint at earlier rate hike: Nasdaq slips 3.3%

Here are the major moves in the markets as of 4:02 PM ET:

  • Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): -92.87 (-1.94%) to 4700.67

  • dow (^ DJI): -392.35 (-1.07%) to 36407.30

  • Nasdaq (^ ninth): -522.54 (-3.34%) up to 15100.17

  • raw (CL = F.): + $0.07 (+0.09%) to $77.06 per barrel

  • gold (GC = F.): – $4.40 (-0.24%) to $1,810.20 per ounce

  • Treasury for 10 years (^ degeneration): +3.7 basis points to produce 1.7050%

12:54 PM ET: Bitcoin Falls, Crypto-related Stocks Slip Amid Technology Defeat

Bitcoin prices fell more than 1% on Wednesday afternoon to trade just above $46,000, with cryptocurrencies coming under pressure along with large-cap tech stocks falling.

Publicly traded companies exposed to bitcoin also declined. Bakkt (BKKT) shares are down more than 7%, while Marathon Digital (MARA) and Riot Blockchain (RIOT) are down more than 9% and 7%, respectively, in intraday trading.

11:27AM ET: Microsoft shares are down 2.5%, heading for the fifth straight day of losses

Shares of software giant Microsoft (MSFT) were on track to fall for a fifth consecutive day on Wednesday, dropping as much as 2.5% at session lows.

If Microsoft shares end the session lower, it would be the stock’s longest losing streak since September. The decline came amid a broader slide in high-value technology and growth stocks, in part due to higher Treasury yields and pressure on higher tech valuations.

10:33 a.m. ET: The Nasdaq-listed blockchain company has announced its plans to offer its first-ever Bitcoin return.

BTCS Inc. announced. listed on Nasdaq on Wednesday that it will be the first publicly traded US company to offer investors the ability to receive a dividend issued by Bitcoin.

The data and blockchain analytics company said shareholders can receive a cash dividend of 5 cents per share or the equivalent in Bitcoin, which the company calls “Bividend.” Investors will need to sign up for their selection by March 16, before the standard date of March 17.

“This is a moment we have long anticipated since the company purchased the domain, bividend.com, in February 2015,” Charles Allen, CEO of BTCS, said in a press release. “BTCS is now in the financial position required to implement the company’s vision.”

The company, based in Silver Spring, Maryland, said it was “assessing the appropriateness of future dividends”.

9:30 a.m. ET: Stocks open lower

Here is where the markets traded after the opening bell:

  • Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): -6.35 (-0.13%) to 4787.19

  • dow (^ DJI): -10.76 (-0.03%) to 36788.89

  • Nasdaq (^ ninth): -69.27 (-0.47%) to 15,548.99

  • raw (CL = F.): +0.95 dollars (+1.23%) to 77.94 dollars per barrel

  • gold (GC = F.): + $13.30 (+0.73%) to $1,827.90 per ounce

  • Treasury for 10 years (^ degeneration): -1.7 basis points to produce 1.649%

8:22 a.m. ET: Private payrolls grew much more than expected in December: ADP

Private sector employers added significantly more jobs than expected in the last month of 2021, indicating at least some widespread vacancies are being filled across the economy.

The ADP said on Wednesday that private payrolls grew by 807,000 in December. That was nearly double the consensus of 410,000 economists had expected, according to Bloomberg data. Employers returned 505,000 jobs in November, according to the ADP’s revised estimate for that month.

The ADP report is one metric that sets expectations for the “official” government jobs report due for release on Friday from the Labor Department. However, the ADP’s print during the pandemic in particular has served as an incomplete indication of what to expect from the Labor Department’s reports. In three of the past four months, the ADP print has exceeded the Labor Department’s payroll figure, which last came in disappointing at 210,000 for the month of November.

7:08AM ET Wednesday: Stock futures point to a lower open

Here is where the markets were trading before the opening bell:

  • S&P 500 futures contractsES = F.): -3.25 points (-0.07%) to 4,781.00

  • Dow futures contractsYM = F.): -1 point (-0.00%), to 36674.00

  • Nasdaq futures contractsNQ = F.): -56.5 points (-0.35%) to 16,219.25 points

  • raw (CL = F.):- $0.04 (-0.05%) to $76.95 per barrel

  • gold (GC = F.): +$4.70 (+0.26%) to $1,819.30 per ounce

  • Treasury for 10 years (^ degeneration): -1.5 basis points to produce 1.651%

6:15 PM ET Tuesday: Stock futures changed little

Here’s where the markets are trading on Tuesday evening:

  • S&P 500 futures contractsES = F.): -0.75 points (-0.02%) to 4,783.50 points

  • Dow futures contractsYM = F.): -12 points (-0.03%) to 36,663.00

  • Nasdaq futures contractsNQ = F.): -9.5 points (-0.06%) to 16266.25

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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