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The S&P 500 fell 0.6%, the Dow Jones Industrial Average fell 0.4%, or 151 points, and Nasdaq fell 0.9%.
Most Federal Reserve officials said “significant” upside risks to inflation keep further monetary policy tightening on the table for later this year, according to the minutes from the July 25-26 Federal Open Market Committee meeting published Wednesday.
The minutes also revealed a Fed U-turn on the outlook for the economy, with Fed staff no longer expecting a “mild” recession later this year.
The hawkish overtones gave credence to bets for higher for longer rates, pushing Treasury yields to fresh October highs.
Tech led the broader market to the downside as chip stocks took a breather from the recent melt-up amid pressure from Intel Corporation (NASDAQ:INTC), Coherent Inc (NYSE:COHR), and Advanced Micro Devices Inc (NASDAQ:AMD).
Intel fell more than 1% after walking away from plans to acquire Tower Semiconductor (NASDAQ:TSEM) as the chipmaker failed to secure regulatory backing for the deal in time. Intel will pay a break-up fee of $353 million for backing out of the deal.
Coherent Inc (NYSE:COHR), meanwhile, slumped more than 30% after reporting an unexpected Q4 loss and delivering weaker than expected guidance.
Target Corporation (NYSE:TGT) reported second-quarter revenue that fell short of Wall Street estimates and the retailer cut its annual guidance, but the stock rose more than 1% as investors cheered signs of leaner inventory levels and improved margins.
TJX Companies Inc (NYSE:TJX) climbed 4% after lifting its annual guidance as Q2 results topped estimates after lower costs helped boost margins.
“Overall, this is a strong result for TJX and we are encouraged by the magnitude of the quarterly beat and full year guidance increase,” Goldman Sachs said in a note.
Coinbase Global Inc (NASDAQ:COIN) said Wednesday it won regulatory approval from the National Futures Association, to offer bitcoin and ether futures to eligible U.S. consumers.
The approval is expected to unlock growth for cryptocurrency exchange, Andrew Sears CEO of Coinbase Financial Markets said, as crypto derivatives make up the bulk, roughly 7%, of global crypto trading.
