The stock market indexes closed lower and worsened over the final 90 minutes of trading to close at the lows of the day. Selling grew after the release of the Fed meeting minutes, while the 10-year Treasury continued to rise.
Most Federal Reserve officials still see serious inflation risks that may require more interest-rate hikes, according to MarketWatch.
The benchmark 10-year Treasury yield rose 4 basis points to 4.26%. The yield reached the highest level since June 13, 2008, based on quotes at 3 p.m. ET, Dow Jones Market Data said.
The CME FedWatch Tool sees an 88.5% chance of a rate-hike pause in September and a 35.5% chance of a 25-basis-point hike in November.
The Nasdaq composite shed 1.2% in stock market action. The Dow Jones Industrial Average lost 0.5% and the S&P 500 fell 0.8%. The small-cap Russell 2000 underperformed the major indexes and fell 1.3%.
The Nasdaq composite dipped further below its 50-day moving average. The Dow traded below its 21-day-exponential moving average for a second day, while the S&P 500 closed below its 50-day line for the second day in a row.
The Nasdaq 100-tracking Invesco QQQ Trust ETF retreated 1.1%. And the Innovator IBD 50 ETF lost 1.3%.
Volume fell on the NYSE but rose on the Nasdaq vs. the same time on Tuesday, according to preliminary numbers.
Futures Rise On China Stimulus Hopes, But Yields Keep Climbing
Stock Market Action: AI Venture Rocks Investors
Quantum computing stock IonQ tanked 12% on Tuesday's news that the company formed an alliance with Zapata AI. The collaboration melds generative artificial intelligence techniques on quantum hardware to enhance quantum computing.
TJX Cos.climbed 4.1% in heavy volume after the discount retailer exceeded analysts' Q2 sales and profit expectations and reported declining inventories.
Target trimmed morning gains following the company's better-than-expected second-quarter earnings and a miss on sales. TGT closed up 2.9% on the day. The retailer gave lower 2023 EPS guidance. The stock has slumped for most of this year.
DLocal soared 32% in huge volume, after the South American payments platform beat Q2 revenue and profit forecasts and reaffirmed its full-year 2023 revenue guidance. Quarterly earnings grew 50% on 59% sales growth. Analysts project 76% EPS growth this year and 40% next year.
Other Stock Movers: Insurance Stock Rallies
IBD 50 stock DraftKings fell 3.5% to close below its 50-day line.
Analog Devices skidded 2.3% to fall below its 200-day moving average as chip stocks felt pressure.
Progressive popped 8.9% in heavy volume, after the insurance company reported its July net premiums written increased 21%, while total policies in force rose 11% in July. The stock was the S&P 500's biggest gainer Wednesday.
IBD 50 insurance stock Brown & Brown gained 2.5% and is extended from a handle entry, as it nears its 52-week high.
Performance Food Group shot up 9.1% in heavy action after the food distributor reported a mixed fiscal fourth quarter and gave in-line current-quarter and full-year sales guidance. The stock climbed above the 62.32 buy point of a cup with handle.
Tesla fell 3.2% on news that the EV giant cut prices in China for the second time in less than a week.
Coherent gapped down nearly 30% and fell below its 200-day line. The company beat quarterly estimates but gave disappointing sales and earnings guidance late Tuesday.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
