by On Friday, US stocks declined in a broad selloff with megacaps leading, while US government bond yields climbed.
After gaining for four weeks in a row, the S&P 500 recorded losses for the week.
Markets decline
Microsoft Corp, Apple, and Amazon.com all recorded declines and were weighing down both the Nasdaq and the S&P 500.
Higher rates are always negative for growth and tech stocks, as their valuations depend more on future cash flows.
There was a rise in US Treasury yields, as the benchmark 10-year bonds rose to almost 3% after monthly producer prices in Germany rose to record highs.
Investors were trying to assess how aggressive the US Federal Reserve would have to be when it comes to raising interest rates to curb inflation.
On Friday, Thomas Barkin, the President of the Richmond Fed, said that there was still a lot of time before the Fed needs to decide how big of a rate hike they need to make in the September meeting.
The policy meeting is scheduled for the next month from the 20th to the 21st. Market analysts said that the increase in rates around the world and the statements from central banks were pushing stocks low.
Indexes fall
There was a 0.86% drop in the Dow Jones Industrial Average, as it dropped by 293.3 points to reach 33,706.74.
A 1.29% drop in the S&P 500 saw it come down by 55.26 points to reach 4,228.48 points. There was also a 2.01% fall in the Nasdaq Composite, as it fell by 260.13 points to reach 12,705.22 points.
Losses for the week were recorded by all three major indexes on Wall Street. There was a 1.2% drop in the S&P 500, while weekly indexes for the Nasdaq were 2.6%.
This was their first week of decline, after having gained for four weeks in a row. The weekly loss for the Dow was around 0.2%.
The S&P 500 had recorded its worst first six months after 1970 but has recovered 16% from its low in mid-June.
This was because corporate earnings had turned out to be stronger than expected and hoped that an economic recession can be avoided, even if the Fed is hiking interest rates.
Fed movements
On Thursday, some officials of the US Federal Reserve said that they need to continue hiking rates in order to control inflation that has reached decade highs.
Since March, there has already been an increase in the interest rate by 225 basis points. The focus is now on the speech of Fed chairman Jerome Powell next week in Jackson Hole, Wyoming.
There is an annual global conference for central bankers where he will talk about the economic outlook. There was a 40.5% decline in Meme stock Bed Bath & Beyond, as billionaire Ryan Cohen sold his stake.
There was a 2.1% drop in the S&P 500 banking index after it had recorded gains recently. There was a slight rise in the shares of Deere & Co, even though it had lowered its outlook for the full year.
