Stocks finished broadly lower Thursday and Treasury yields hit a one-year high as fears of higher inflation resurfaced despite Federal Reserve Chairman Jerome Powell playing down the risks of increasing price pressures.
The Dow Jones Industrial Average declined 559 points, or 1.75%, to 31,402, the S&P 500 was down 2.45% and the tech-heavy Nasdaq posted its worst effort since October, dropping 3.52%.
Tech stocks were falling the most Thursday as the high-growth stocks can be more vulnerable to inflation pressures. Companies that benefited from the pandemic were being sold as the outlook for the U.S. economy brightened.
U.S. treasury bond yields have been surging -- a sign of inflation sentiment -- and that has many believing the Fed could be prompted to raise interest rates.
But Powell said inflation might take more than three years to hit the Fed’s target of 2%, meaning rates won't be lifted anytime before 2023.
The 10-year Treasury yield traded at 1.485% on Thursday. It rose as high as 1.614%, the highest level in a year.
Stocks were lower even after jobless claims last week dipped as disruptions from severe winter storms failed to spur a rise in Americans seeking first-time unemployment benefits.
The Dow set a record Wednesday after Powell said the Fed would remain supportive of the economy and he played down concern over near-term inflation.
House Democrats, meanwhile, expect to pass President Joe Biden's $1.9 trillion coronavirus relief bill on Friday. It would then move to the Senate for a vote, with hopes of sending it to Biden for his signature before March 14.
The videogame retailer was at the center of the Reddit-fueled buying frenzy last month. Fellow Reddit favorite AMC Entertainment (AMC) - Get Report was rising initially Thursday, but finished down 8.8%.