US stocks drop in dramatic reversal of rally earlier in the day
Traders are bracing for the possibility of more aggressive policy tightening by the United States Federal Reserve. U.S. stocks slid as the selloff in Treasuries resumed, with traders bracing for the possibility of more aggressive policy tightening by the Federal Reserve. The dollar gained. The S&P 500 dropped 1.5% in a dramatic reversal of a more than 1% rally in early trading Thursday on the back of upbeat earnings. The tech-heavy Nasdaq 100 fell about 2%, underperforming than main benchmarks, as the jump in yields weighed on growth-related stocks. Treasury yields rose across the curve, with the policy-sensitive two-year rate climbing as much as 15 basis points 2.73% as traders priced in 50 basis-point rate hikes at each of the next three meetings. The dollar gained against all of its major peers following the surge in yields. Fed Chair Jerome Powell said he saw merit in the argument for front-loading interest-rate increases and that a half-point hike “will be on the table f...