Stock rates fall as traders anticipate further interest rate hikes

Stocks on Wall Street dipped Friday as worries about interest rates overshadowed an encouraging start to earnings reporting season for big U.S. companies, the Associated Press states.

The S&P 500 fell 8.58 points, or 0.2%, to 4,137.64 after giving up an early gain. Boeing was one of the heaviest weights on the S&P 500. Its stock slid 5.6% after the aircraft maker said Thursday that production and delivery of a “significant number” of its 737 Max planes could be delayed because of questions about a supplier’s work on the fuselages.

The Dow Jones Industrial Average lost 143.22, or 0.4%, to 33,886.47, while the Nasdaq composite sank 42.81, or 0.4%, to 12,123.47. High-growth stocks tend to be among the most hurt by high interest rates, and Big Tech stocks were among the heaviest weights on the S&P 500. Microsoft fell 1.3%.

Traders have built bets that the Fed will once again raise interest rates at its next meeting in May, instead of taking its first pause in more than a year. Additionally, consumer expectations for increased inflation are on the rise, which could be troublesome, as the Fed has long feared entrenched expectations of high inflation could lead to a vicious cycle that keeps it high.

All the worries helped push Treasury yields higher. The 10-year Treasury yield rose to 3.51% from 3.45% late Thursday. It helps set rates for mortgages and other important loans. The two-year Treasury yield moves more on expectations for the Fed, and its gain was sharper, up to 4.10% from 3.97%.