DOW Falls 300 Points after Fed Chair Powell Inflation Comments

Posted on 03/04/2021


UPDATE at 11:18 AM PST: The Dow Jones Industrial Average has now fallen 698 points, or 2.23%, to 30,571, the S&P 500 plummeted 2.43% and the Nasdaq tumbled 3.31%.

The S&P 500 last traded down 1.2%, killing earlier gains, while the Dow Jones Industrial Average slid 310 points. U.S. growth stocks are getting hammered as the 10-year-yield rises.

The S&P 500 and Nasdaq turned negative for the year.

U.S. stocks dropped for a third day after Federal Reserve Chair Jerome Powell was not able to reassure investors that the Fed would keep surging bond yields and inflation in check.

“We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” Chair Powell commented. “That could create some upward pressure on prices.”

There was a large move up in bond yields after Powell’s remarks. The 10-year yield surpasses last week’s high. This could be a sign that fixed income investors think U.S. inflation will rise and that the U.S. economy will get stronger.

Keywords: Federal Reserve System.

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