Hawkish comments from Federal Reserve chair Janet Yellen yesterday which boosted expectations of an interest rate hike pulled US stocks sharply lower. Investors also attributed late-day selling to news coverage of a shooting in southern California, in which 12 people are said to have been killed .
The Dow Jones industrial average fell 158.67 points, or 0.89 per cent, to 17,729.68, the S&P 500 lost 23.12 points, or 1.1 per cent, to 2,079.51 and the Nasdaq Composite dropped 33.08 points, or 0.64 per cent, to 5,123.22.
Yellen said she was “looking forward” to a rate hike that will be seen as a testament to the economy's recovery from recession. The Fed’s next policy meeting is 15-16 December.
“I was a little surprised she sounded as hawkish as she did given we’re two days away from the non-farm payrolls report and a couple of weeks away from the Fed meeting,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Yahoo jumped 5.8 per cent to $35.65 after reports the company could sell its core internet business.
Shares of Amazon ended down 0.4 per cent at $676.01. Netflix closed at $128.93, up 2.8 per cent. Alphabet was down 0.8 per cent at $777.85.
The S&P 500 energy index fell 3.1 per cent, leading declines in the S&P 500 as US crude oil futures finished the session down 4.6 per cent at $39.94. The utility index, which tends to underperform in a higher-rate environment, dropped 2.2 per cent.
It was the day’s second-worst performing sector, although all 10 S&P sectors ended lower.