S&P 500 ends 1.5% lower, stocks skid as Fed’s Powell warns of potential need for higher rates

U.S. stocks closed sharply lower on Tuesday after Federal Reserve Chairman Jerome Powell warned of the potential need for higher rates to cool inflation if economic data stays strong. The Dow Jones Industrial Average DJIA, -1.72% fell about 574 points, or 1.7%, ending near 32,856, while the S&P 500 index SPX, -1.53% shed about 1.5% and the Nasdaq Composite Index closed down 1.3%, according to preliminary FactSet figures.

Importantly, the S&P 500 on Tuesday also broke below its 50-day moving average of 3,994 intraday, a level stock-market investors closely monitor for signs that stocks could be ripe for an upswing when it is exceeded or vulnerable to further downward pressure when it slips below the average. Also pressuring stocks lower on Tuesday was a further climb in Treasury yields, with the 2-year rate TMUBMUSD02Y, 5.010% exceeding 5% as of 3 p.m.

Taxes going up! Interest rates going up! Looks good! Thank you Biden!

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