By Yasin Ebrahim
Investing.com – The Dow suffered its worst decline of the year on Friday, as a sea of red swept over stocks following mostly disappointing quarterly earnings from corporates and growing worries about aggressive Federal Reserve rate hikes.
The slipped 2.8%, or 981 points, the fell 2.8%, and the fell 2.6%.
Health care was one of the worst performing sectors on the day, pressuring the broader market paced by a slump in HCA and Intuitive Surgical.
HCA Holdings (NYSE:) fell 22% after reporting mixed quarterly results and cutting its full-year guidance following the impact of the pandemic and rising costs.
Intuitive Surgical (NASDAQ:) fell more than 14% as its better-than-expected first-quarter results were overshadowed by “the lack of follow-through on the procedure guide and the commentary around a potentially softer U.S. capital pipeline,” Raymond James said as it cut its price target on the stock to $330 from $334.
Sentiment on stocks was also soured by expectations that the Federal Reserve is set for an even tighter path of monetary policy following hawkish remarks from Chairman Jerome Powell a day earlier.
Powell on Wednesday said that a 50 basis-points hike was on the table for the May meeting, and added that the central bank was open to front-loading more than one 50 basis point hike beyond the May meeting.
“The market was already anticipating a 50bps hike next month. Going forward, however, against the backdrop of this week’s Fed commentary, an even larger 75bp hike is now on the table,” Stifel said in note.
The briefly rose to its highest since 2018, before giving up gains. While the 2-year Treasury yield, which is more sensitive to the Fed’s rate hikes, continued to advance.
Against the backdrop of rising rates, the enemy of growth stocks, tech continued to trade in the red.
Google-parent Alphabet (NASDAQ:), Amazon (NASDAQ:), Microsoft (NASDAQ:), Apple (NASDAQ:) and Meta (NASDAQ:) were down more than 2%.
Communication services were also the big drag on the broader market after Verizon Communications (NYSE:) suffered its biggest drop in more than two years. The telecoms giant cut its full-year sales forecast.
In other news, Bed Bath & Beyond Inc (NASDAQ:) jumped more than 6% on reports that the company is fielding interest for its BuyBuy Baby business.