NEW YORK (AP) — U.S. stocks closed lower as more steam came out of Wall Street’s huge, record-breaking rally. The S&P 500 fell 0.9% Wednesday. It was the third loss in a row for the benchmark index, the first time that’s happened in six weeks. The Dow Jones Industrial Average dropped 1%. The Nasdaq composite sank 1.6% as Nvidia and other Big Tech stocks were among the market’s heaviest weights. Momentum has reversed for stocks since the S&P 500 set a record on Friday as pressure has increased from rising Treasury yields in the bond market. Yields rose again Wednesday.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — U.S. stocks are falling Wednesday as more steam comes out of Wall Street’s huge, record-breaking rally.
The S&P 500 was down 1.1% in late trading and heading for its worst drop in six weeks. It’s also on track for its first three-day losing streak since then, following two small losses since it set an all-time high on Friday. The pullback follows a superb run where the index rallied to six straight winning weeks, its longest such streak of the year.
The Dow Jones Industrial Average was down 415 points, or 1%, as of 3 p.m. Eastern time, and the Nasdaq composite was 1.8% lower after Nvidia and other Big Tech stocks were among the market's heaviest weights.
Momentum has reversed for stocks this week as pressure has increased from rising Treasury yields. Higher yields can make investors less willing to pay high prices for stocks, which critics say already look too expensive after they rose faster than corporate profits.
“Slowly, then suddenly,” stock investors have been noticing the moves in the bond market, along with the rally for the U.S. dollar's value against other currencies, according to Jonathan Krinsky at BTIG.
McDonald’s helped pull the market lower and dropped 4.9% after federal health officials linked its Quarter Pounder burgers with an E. coli outbreak that’s affected at least 49 people in 10 states. Investigators are still trying to find what specific ingredient is contaminated, and the Centers for Disease Control and Prevention said McDonald’s stopped using fresh slivered onions and quarter pound beef patties in several states while the investigation is ongoing.
Coca-Cola fell 1.6% even though it reported stronger profit and revenue for the latest quarter than analysts expected. The company benefited from higher prices for its products, but a lot of focus was on how much product the company shipped during the quarter, and that fell short of some estimates.
Boeing slipped 1.1% in what could be one of the most consequential days in years for the troubled aerospace manufacturer.
The company reported a loss of more than $6 billion for the latest quarter, as it waits to see the results of a vote by machinists later in the day that could end a strike that’s crippled aircraft production for more than a month. Boeing stock has lost 40% this year.
The market's most impactful losses came from Big Tech stocks, which have been battling criticism for a while that their prices soared too high amid Wall Street's frenzy around artificial-intelligence technology. Nvidia's 3.1% drop and Apple's 2.7% fall were the two heaviest weights on the S&P 500.
Helping to limit the losses for indexes was AT&T, which rose 3.2% after reporting stronger profit for the latest quarter than analysts expected
Texas Instruments climbed 4.3% after the semiconductor company reported stronger profit and revenue than analysts expected. While revenue from industrial users declined from the prior quarter, CEO Haviv Ilan said all other end markets grew.
Northern Trust rallied 7.5% after likewise topping analysts’ estimates for profit and revenue in the latest quarter.
In the bond market, the yield on the 10-year Treasury rose again Wednesday to 4.24% from 4.21% late Tuesday and from just 4.08% Friday.
Treasury yields have been climbing after a raft of reports have shown the U.S. economy remains stronger than expected. That’s good news for Wall Street, because it bolsters hopes that the economy can escape from the worst inflation in generations without the painful recession that many had worried was inevitable.
Traders are now largely expecting the Fed to cut its main interest rate by half a percentage point more through the end of the year, according to data from CME Group. A month ago, some of those same traders were betting on the federal funds rate ending the year as much as half a percentage point lower than that.
In stock markets abroad, Japan’s Nikkei 225 slipped 0.8% despite a surge for Tokyo Metro Co.’s stock in Japan’s largest market debut since SoftBank Corp. went public in 2018.
Chinese markets rose for a second day after the central bank cut its one-year and five-year Loan Prime Rates on Monday. Indexes rose 1.3% in Hong Kong and 0.5% in Shanghai, while European markets were modestly lower.
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AP Writers Matt Ott and Zimo Zhong contributed.
Stan Choe, The Associated Press