U.S. stocks fell and Treasury yields jumped after new Federal Reserve Chair Kevin Warsh signaled in his first press conference that an interest-rate hike later this year is more likely than not. The S&P 500 dropped 1.2% to around 7,420.10, the Nasdaq Composite lost 1.3%, and the Dow Jones Industrial Average fell 507 points, or 1%, to 51,492.55. The rate-sensitive SPDR Homebuilders ETF declined 2.3% to $107.33. The 2-year Treasury yield surged 11.4 basis points to 4.160%, its biggest jump since March, while the 10-year yield rose 3.6 basis points to 4.462%, compressing the yield curve. Higher yields weighed on gold and boosted the U.S. dollar against major rivals.
Compass IncHomebuilders are rate-sensitive; hawkish Fed signals higher rates, pressuring housing demand and Compass's business.
HSBC Holdings PLC