Powell’s Rate-Hike Comments Trigger Sharp Reversal

• US stocks turned sharply lower Thursday after hawkish comments from the Federal Reserve.
• Chairman Jerome Powell said a 50-basis-point rate hike could be coming in May. 
• The yield on the 10-year Treasury jumped as much as 9 basis points before paring gains.

US stocks reversed sharply lower Thursday and Treasury yields jumped, after

Federal Reserve

Chairman Jerome Powell said that bigger rate hikes could be looming next month. 

“I would say 50 basis points will be on the table for the May meeting,” Powell said at the International Monetary Fund Debate. That would double the Fed’s last increase of 25 basis points.

The 10-year yield jumped as much as 9 basis points after the remarks before paring gains to 2.90%, up 6.4 basis points.

The stock market sell-off followed this week’s rally on strong corporate earnings reports, including Tesla’s blowout revenue beat. 

Here’s where US indexes stood as the market closed at 4:00 p.m. on Thursday: 

Elsewhere in the market, Michael Saylor said MicroStrategy’s stock is essentially serving as a spot bitcoin ETF, given the massive amounts of the crypto that the company buys. So far, a real ETF has yet to be approved in the US. 

Meanwhile, top commentators continue to sound off on the Russia-Ukraine conflict, with David Einhorn warning that the war may tip the US economy into a recession.

Goldman Sachs lowered Russia’s sovereign risk score, meaning the bank thinks the country is less likely to pay its debts. Analysts said their rating reflects the “technical nature” of Russia’s debt issues.

Russia’s central bank chief denied that Moscow is at risk of default, saying that the nation had the necessary financial resources to make payments. The comments came as Russia’s second-largest bank slid closer to a technical debt default.

Separately, a growing amount of Russian oil is being sent “destination unknown” as wary buyers try to avoid affiliation with the sanctioned nation. More than 11.1 million barrels have been loaded onto cargoes with unknown destinations this month — up from nearly none before the Ukraine war.

Oil inched higher, with West Texas Intermediate up 1.3% to $103.54 a barrel. Brent crude, the international benchmark, rose 1.20% to $108.08 a barrel. 

Gold slipped 0.30% to $1,955.30 per ounce. Bitcoin rose 0.55 % to $41.424.11.