NEW YORK: Wall Street closed lower on Wednesday, as climbing Treasury yields pressured megacap stocks and investors grew less confident about strong rate cuts from the Federal Reserve, while corporate news pressured McDonald's and Coca-Cola.
Benchmark 10-year U.S. Treasury yields reached a three-month high with investors reassessing the Fed rate-cut outlook over the next few months against the backdrop of strong economic data and the upcoming presidential election.
"The market is struggling to digest this latest backup in yields," said Adam Turnquist, chief technical strategist for LPL Financial, adding higher rates are pressuring stocks.
Among rate-sensitive megacaps, Nvidia fell 2.81 per cent, Apple 2.16 per cent, Meta Platforms 3.15 per cent and Amazon slid 2.63 per cent, dragging on the tech-laden Nasdaq.
Out of the 11 S&P sub sectors, only utilities and real estate posted gains.
The Dow Jones Industrial Average fell 409.94 points, or 0.96 per cent, to 42,514.95, the S&P 500 lost 53.78 points, or 0.92 per cent, to 5,797.42 and the Nasdaq Composite lost 296.47 points, or 1.60 per cent, to 18,276.65.
McDonald's tumbled 5.12 per cent after an E. coli infection linked to its Quarter Pounder hamburgers killed one and sickened many. Coca-Cola fell 2.07 per cent after the company reiterated its annual profit growth forecast even though it expected higher revenue.
The broader consumer discretionary sector also dropped 1.82 per cent, while the information technology was down 1.68 per cent.