Wall St drops as Powell backs aggressive rate hike

STORY: U.S. stocks fell across the board Thursday, as concerns about rising interest rates hijacked initial momentum from positive earnings.

Stocks sank following comments from Federal Reserve Chair Jerome Powell, who said a 50-basis point interest rate hike "will be on the table for the May meeting," and that with inflation running roughly three times the Fed's target, it's "appropriate to be moving a little more quickly."

The Dow ended down a percent. The S&P 500 finished a percent and a half lower, while the Nasdaq lost more than 2 percent.

David Bahnsen is chief investment officer at The Bahnsen Group.

"Well, I think the markets have been on a little recovery rally the last few days and they started off the same this morning. And then I think midday you hit into a little bit of resistance, partially just people selling from what's been a few good days of trading. And then the Fed did sort of crystallize that there will be, probably, a half-point rate hike next month. [FLASH] It might have shaken out some short-term traders. I think it's more algorithmic than anything substantive."

High-growth stocks including Google-parent Alphabet and Amazon suffered substantial losses, after yields on two-year bonds, the most sensitive to interest changes, hit their highest level in three years.

Shares of Facebook-owner Meta Platforms ended down more than 6% after falling sharply the day prior.

Netflix also extended losses. The stock collapsed this week after the streaming giant's earnings report alarmed investors.

But strong results from megacap Tesla kept its shares in the green, finishing more than 3% higher. Earnings from the world's most valuable automaker beat Wall Street expectations, as higher prices helped it overcome supply-chain issues and rising costs.

Shares of United Airlines soared, closing up more than 9% after the carrier predicted a return to profit in the current quarter due to booming travel demand. Delta and American Airlines went along for the ride, closing up 2.7% and 3.8%, respectively.

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