Stocks Fall as 30-Year Bond Yields Surge After Fed: Markets Wrap
(Bloomberg) — Stocks ended sharply lower as concerns about inflation drove longer-dated bond yields to an almost two-decade high after the Federal Reserve left rates steady despite a resurgence in oil prices.
The S&P 500 fell 1.5%, with the gauge also pummeled by a rout in chipmakers. The Nasdaq 100 entered a technical correction, extending a slide from a record to 11%. Treasury 30-year yields hit the highest since 2007. Brent crude topped $90. In late hours, Meta Platforms Inc. gave a lackluster forecast. Microsoft Corp.’s cloud unit grew at the fastest pace in four years.
Fed Chairman Kevin Warsh insisted policymakers’ decision to leave interest rates unchanged wasn’t a sign of inertia at the central bank, which he reiterated is committed to tackling price pressures.
He added markets will be freer to chart their own course based on economic signals. With guidance curtailed, “participants are learning to play the ball and not the referee,” he said, noting a tightening in financial conditions since the last meeting “provided us some comfort that we’ve got the ability and capability to deliver” on inflation.
The absence of explicit forecasts – and Warsh’s nods to market autonomy – may have spurred volatility in bond rates.
Apollo Global Management’s Torsten Slok said the Fed’s abandonment of guidance is fueling historic bond market volatility, sending Treasury yields swinging “up and down like a yo-yo.”
“There is very little to hang your head on in the markets,” Slok told Bloomberg Television. “It was also a little bit complicated to figure out what was the basis of the decision today.”
“Not that I thought hiking to establish credibility was the reason to do a hike, but instead of hiking to establish credibility, Warsh held, said we are in a period of watchful thinking and squandered some credibility,” said Neil Dutta at Renaissance Macro Research.
Warsh’s press conference statements, which emphasized the Fed’s commitment to price stability, resilient economic growth and persistently above target inflation, suggested that some policy firming may still be warranted, although maybe not as imminently as the markets had priced, according to Tiffany Wilding at Pacific Investment Management Co.
“Warsh said nothing to signal that a hike could come as soon as September,” she added.
Warsh indicated that one of the key questions debated is how effective interest-rate changes are in combating economic shocks, and also how economic shocks translate into intermediate-term inflationary pressures, according to Josh Jamner at ClearBridge Investments.
“However, consistent with his stated preference to provide less guidance to financial markets, Warsh offered precious few clues as to his current thinking on these key questions,” he said.
Corporate Highlights:
Qualcomm Inc., the largest maker of smartphone processors, gave a weak profit forecast for the current quarter, signaling that component shortages and rising costs are taking a toll on its main market. Arm Holdings Plc delivered a sales forecast that failed to impress investors, who have grown increasingly wary about chip-industry prospects in recent days. Starbucks Corp. raised its annual outlook after quarterly results surpassed market estimates, a sign that efforts to attract diners with speedier service and new products are paying off. Chipotle Mexican Grill Inc. raised its annual guidance after bringing back its popular honey chicken and overhauling its rewards program. Carvana Co. said full-year earnings may fall short of Wall Street’s expectations as the used-car retailer’s rapid growth slowed and per-car profit slipped in the most recent quarter. Some of the main moves in markets:
Stocks
The S&P 500 fell 1.5% as of 4 p.m. New York time The Nasdaq 100 fell 2.1% The Dow Jones Industrial Average fell 2.2% The MSCI World Index fell 1% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.6% to $1.1450 The British pound rose 0.4% to $1.3345 The Japanese yen rose 0.2% to 163.54 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $63,432.18 Ether fell 1.8% to $1,881.08 Bonds
The yield on 10-year Treasuries advanced seven basis points to 4.68% Germany’s 10-year yield advanced six basis points to 3.16% Britain’s 10-year yield advanced nine basis points to 5.04% Commodities
West Texas Intermediate crude rose 6.9% to $84.73 a barrel Spot gold rose 0.6% to $4,053.76 an ounce ©2026 Bloomberg L.P.
