Stocks fell Wednesday in another round of choppy trading on Wall Street, as investors continued weighing the impact of rising interest rates.
The Dow Jones Industrial Average dropped 19 points, or 0.08%, to 24,893. The S&P 500 lost 13 points, or 0.5%, to 2,681. The Nasdaq Composite was down 63 points, or 0.9%, at 7,051.
The stock market has gone through severe swings this week, including a 1,175-point tumble for the Dow on Monday. Stronger wage growth has put a spotlight on the Federal Reserve. The central bank could move to raise interest rates at a faster clip this year to maintain control over inflation—a decline in the value of money due to rising prices. Low interest rates, which encourage consumers and businesses to borrow money, contributed to the stock market’s record-breaking run with the Dow soaring past 26,000 for the first time.
Wall Street’s worries over inflation and interest rates ignited volatility in markets. The CBOE Volatility Index, known as the “fear gauge,” dropped 7.5%. The VIX spiked 115% amid the Dow’s historic plunge Monday.
“We thought 2017 would offer at least one opportunity to take advantage of a 7% or 8% correction, but it never materialized as the market kept grinding higher throughout the year. Now we have an opportunity,” Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, wrote in a note to clients.
The blue-chip index recovered 568 points Tuesday, followed be renewed buying earlier Wednesday. The Dow traded in positive territory throughout the session, but it shed about 280 points heading into the closing bell.
West Texas Intermediate oil settled 2.5% lower at $61.79 per barrel.
In the “old days,” when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!— Donald J. Trump (@realDonaldTrump) February 7, 2018
The yield on the benchmark 10-year Treasury bond rose 7.2 basis points to roughly 2.84%.
Gold futures slipped nearly 1% to $1,317 per troy ounce.
In corporate news, Walt Disney (NYSE:DIS) shares fell about 1% after reporting revenue that missed expectations.