Investing.com — The Dow Jones Industrial Average closed lower on Friday, led by a tumble in tech stocks following a jump in Treasury yields, after data indicating rising expectations for higher inflation in the longer term fueled further investor fears of Federal Reserve rate hikes.
The index lost 1.3%, or 403 points, the lost 2.3%, the lost 3%.
The University of Michigan showed the median expected rate rose to 5.1%, above the 4.7% seen in September.
The rise in inflation expectations, a move closely watched by the Federal Reserve, comes just a day after data showed worse-than-expected inflationary pressure.
“We see disinflationary factors on the horizon, including a reversal in vehicle prices and a slowdown in medical services,” according to Morgan Stanley . “Risks point to further tightening of monetary policy by the Fed this year,” he added.
Treasury yields climbed to over 4% as the probability of a 0.75% Fed rate hike for November is now almost 100%.
Rising rates weighed heavily on growth sectors of the market, including technology stocks and consumer discretionary stocks.
Apple Inc (NASDAQ:), down 3%, led the big tech companies lower, while Microsoft Corporation (NASDAQ:), Alphabet (NASDAQ:) and Meta Platforms (NASDAQ:) lost more than 2% .
Wall Street’s big banks, meanwhile, kicked off quarterly earnings season, with results mostly beating expectations.
JPMorgan Chase & Co (NYSE:) rose more than 2% after reporting better-than-expected Q3 results as higher interest rates boosted net interest income and offset weakness in investment bank.
(NYSE:) and (NYSE:) also reported better-than-expected quarterly results, but Morgan Stanley (NYSE:) deviated from the trend due to weak results from its investment banking business.
Tesla (NASDAQ:) plunged more than 7%, dragging consumer discretionary stocks down, after Wells Fargo cut its price target on the stock from $280 to $230, citing concerns about the impact of rising interest rates.
The price cut comes a week ahead of the electric car maker’s third-quarter earnings release, scheduled for October 19.
After-market Albertsons (NYSE:) fell more than 8% following reports that Kroger (NYSE:) agreed to buy the owner of Safeway in a deal valued at 24.6 billion, or $34.10 per share.
By Yasin Ebrahim