Wall Street slipped on Thursday as investors weighed rising oil prices, inflation concerns, and a weaker outlook for interest-rate cuts. This Wall Street falls on rate fears story reflects a market increasingly worried that the Federal Reserve may stay on hold far longer than expected.
Traders focused on Jerome Powell’s warning that the economic outlook remains uncertain. The Fed kept rates unchanged, but futures markets pointed to fading hopes for near-term easing. According to CME FedWatch, traders were pricing in little chance of a rate cut before mid-2027.
Inflation worries grew after attacks on major energy facilities pushed Brent crude above $119 a barrel. That sharp move in oil added pressure to markets already uneasy about whether central banks can lower rates without reigniting inflation.
The Bank of England and the European Central Bank also left rates unchanged and pointed to uncertainty linked to the Middle East conflict. Their stance reinforced the view that policymakers are still focused on inflation risks.
The S&P 500 fell 0.68% to 6,579.33, while the Nasdaq dropped 0.77% to 21,982.25. The Dow Jones Industrial Average lost 0.86% to 45,829.71, according to the source text.
The broader tone also weakened across sectors. 10 of the 11 S&P 500 sector indexes were lower, led by materials, down 2.21%, followed by consumer discretionary, down 1.38%. The CBOE Volatility Index, often seen as Wall Street’s fear gauge, rose 0.5 points to 24.6.
Among individual names, Micron Technology fell 3.3% after its quarterly forecast failed to impress investors despite strong AI-related demand this year.
Tesla dropped 2.8% after U.S. auto safety regulators escalated a probe into 3.2 million vehicles equipped with Full Self-Driving driver-assistance software over concerns tied to poor visibility.
Elsewhere, weaker precious-metals prices weighed on mining stocks, sending Newmont down 8.6% and Freeport-McMoRan down 4.8%. Fresh economic data showed weekly jobless claims unexpectedly fell, suggesting labour-market conditions remained stable and that job growth rebounded in March.
Even so, the market mood stayed cautious. Declining stocks outnumbered gainers by a 2.7-to-one ratio within the S&P 500, while the Nasdaq recorded far more new lows than new highs. That imbalance underscored the loss of momentum now hanging over equities.
