Stocks fell sharply Wednesday after Wall Street warned of a reversal in the rally sparked by the Federal Reserve's turn last week.
The Nasdaq 100 ended the day down 1.5% as the tech-heavy benchmark drew back from its most recent all-time high, while the S&P 500 fell at a similar rate. Relative strength readings on the gauges had been trading at levels typically seen before a decline. Wall Street's fear gauge, the VIX, also rose sharply, after trading near multi-year lows.
Treasuries surged ahead, with the yield on the policy-sensitive two-year bond falling eight basis points to 3.9%, while British 10-year debt led the global bond rally following data showing a decrease in UK inflation.
On Wednesday, traders absorbed data revealing that US consumer confidence in December increased by the highest since early 2021, indicating that Americans were less afraid about a recession, but experts are still keeping a careful eye on the labor sector.
Separately, previously owned house sales in the United States increased in November after falling to a 13-year low, according to a National Association of Realtors survey, while mortgage rates fell to their lowest level since June.
