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Investing.com – The S&P 500 turned negative Wednesday, as tech gave up gains as U.S bond yields surged after Federal Reserve chairman Jerome Powell hinted that there was a lot more room to hike rates.
The S&P 500 fell 0.3%, after rising about 2% intraday. The Dow Jones Industrial Average fell 0.6%, or 194 points, and the Nasdaq fell 0.1%, erasing a 3% gain.
In his press conference that followed the Fed decision, Powell said there was “quite a bit of room to raise rates without hurting jobs,” stoking expectations that the Fed’s plan to tighten monetary policy measures, which have underpinned risk assets, may be more agressive than expected.
The remarks arrived after the Fed said in a statement that it may “soon” be appropriate to raise rates, and confirmed plans to end its bond purchasing program in early March.
“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said in a statement.
U.S. bond yields surged, putting a dent in growth sectors of the market like tech, with the U.S. 10-year Treasury yield.
Microsoft (NASDAQ:MSFT), which was up more than 5% intraday, gave up some gains after the tech giant delivered an optimistic outlook on revenue following better-than-expected Q2 results.
For the third-quarter, Microsoft guided revenue between $48.5 billion and $49.3 billion, compared with Wall Street estimates for $48.9 billion.
“Microsoft’s cloud guidance was stronger than the Street and when factoring in F/X headwinds we would characterize this as a blowout guide in terms of how investors will digest these numbers” Wedbush said in a note.
The bullish results from the Microsoft helped steady sentiment on growth sectors of the market including consumer discretionary following days of selling.
Tesla (NASDAQ:TSLA), which is set to quarterly results due after the market closes, was well off the highs
Apple (NASDAQ:AAPL), which is set to report quarterly results on Thursday, was up more than 1%.
Boeing Co (NYSE:BA), down 3%, failed to join in on the broader market melt up after the aircraft maker reported a wider than expected loss in Q4 and revenue fell short of estimates as the delay deliveries of its 787 Dreamliner program hurt performance.
