Stocks closed lower Thursday, as higher bond yields once again pulled down shares of technology companies and the energy sector sold off on a drop in oil prices, per the AP. The fell 153 points to 32,862, the S&P 500 fell 58 points to 3,915, and the tech-heavy Nasdaq fell 409 points—3%—to 13,116. Big technology stocks continued to be volatile and move mostly downward, as the tick up in bond yields has made expensive technology stocks less attractive. Apple shares fell 2.7%, Tesla was down 5%, and Microsoft fell 2.3%. Bank stocks were among the best performers as investors bet that higher interest rates would translate into higher profits. Industrial stocks also made solid gains. Wells Fargo was up 3.5%, Bank of America was also up 3.5%, and JPMorgan Chase was up 2.6%.
The market touched new highs a day earlier after the Fed said US economic growth should rebound to 6.5% this year—the strongest since the 1980s—and inflation will climb above 2% for the first time in years. “Early in a cycle you're going to see higher inflation and higher interest rates and demand as global activity picks up,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. Investors have worried that if inflation picks up, central banks might respond by raising interest rates, which would cool economic growth. But Fed Chairman Jerome Powell’s comments at a news conference Wednesday appeared to reassure them. Fed officials have said they would let the economy “run hot” to make sure a recovery is gaining traction.
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