US Equity Indices Slump as Expectations of Tighter Financial Conditions Hit

US equity benchmarks fell on concern that monetary policy is about to get aggressive and amid reports of more sanctions on Russia.

The Dow Jones Industrial Average slid 0.6% to 34,434.86 after midday on Wednesday. The S&P 500 was down 1.1% to 4,475.57, and the Nasdaq Composite slumped 2.2% to 13,885.16.

Technology, communications services and consumer discretionary, which are home to some of the fastest-growing companies in the US, were among the steepest decliners. The energy sector led gainers.

The US 10-year yield jumped 4.7 basis points to 2.6%.

The March minutes from the Federal Open Market Committee scheduled for release later on Wednesday will provide details related to the Fed’s balance sheet runoff plans and receive heavy scrutiny, a D.A. Davidson research note said on Wednesday.

With the runoff of pandemic support, tightening monetary conditions, and the war in Ukraine pressuring commodity prices, growth will moderate this year, Patrick Harker, president of Philadelphia’s Federal Reserve Bank, told the Delaware State Chamber of Commerce on Wednesday.

On Russia, the US and European Union have announced new sanctions after allegations of war crimes against Moscow, according to media reports.

The West Texas Intermediate crude futures fell by $2.49 to $99.57 a barrel.

The International Energy Agency reportedly plans to release 120 million barrels of crude oil from reserves to help ease oil prices. The US will contribute 60 million barrels, which is part of its earlier pledge to release 180 million barrels.

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