Stocks slid further on Thursday as market participants reacted to remarks from Federal Reserve Chair Jerome Powell as the 10-year U.S. Treasury yield climbed towards 5%. The Dow Jones Industrial Average dropped more than 250 points, while the S&P 500 Index and Nasdaq Composite lost roughly 0.9% and 1%, respectively.
Here's how the market settled on Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In focus on Thursday, Powell said inflation still remains too high, making it likely that lower economic growth would be needed to bring it to the central bank's "healthy economy" level of 2%.
"Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal," Powell said in prepared remarks before the Economic Club of New York. "We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters."
Following Powell's afternoon commentary, market participants continued to bet the Fed will hold interest rates at their next policy meeting in early November. Investors are pricing in 97% chance policymakers will hold rates at their current target rate of 5.25% to 5.50%, according to CME Group's FedWatch tool, up from 93% on Wednesday.
Still, rising bond yields weighed on market outlooks after Powell's remarks, with the benchmark 10-year Treasury yield climbing to a high of 4.996% on Thursday, nearing the 5% level not seen since 2007.
On the earnings front, Netflix
"We spent hours and hours with SAG-AFTRA over the last few weeks and we were actually very optimistic that we were making progress," said co-CEO Ted Sarandos during the company's earnings comments Wednesday. "But then at the very end of our last session together the guild presented this new demand on top of everything of a per subscriber levy, unrelated to viewing or success, and this really broke our momentum unfortunately."
Tesla
"I just can't emphasize this enough that for the vast majority of people buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally. So, if interest rates remain high or if they go even higher, it's that much harder for people to buy the car. They simply cannot afford it," Musk said during the company's earnings call Wednesday, adding that the company is focused on making its cars more affordable.
For Friday, investors will turn their attention towards earnings reports from companies including Taiwan Semiconductor Manufacturing Company