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Wall Street stocks fall on US-China tensions, rate hike angst

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Wall Street stocks finished Tuesday’s volatile session lower following more hawkish comments from US central bankers and as jittery investors monitored China’s response to House Speaker Nancy Pelosi’s to Taiwan.

The yield on the 10-year US Treasury note rose sharply following comments from Cleveland Federal Reserve Bank President Loretta Mester and other central bankers that continued to vow aggressive interest rate hikes to counter inflation.

Despite Fed Chair Jerome Powell last week taking a hardline on rising prices, after announcing the second consecutive three-quarter-point increase in the benchmark borrowing rate, weak economic data raised investors’ hopes that policymakers would start to dial back their inflation-fighting campaign.

But recent remarks “have been more hawkish than what’s baked into consensus assumptions,” said Art Hogan, chief market strategist at B Riley Wealth Management.

Meanwhile, markets carefully monitored Pelosi’s movements as she landed uneventfully in Taiwan. But China’s military said it was on “high alert” and would “launch a series of targeted military actions in response” to the US lawmaker’s visit.

The Dow Jones Industrial Average dropped 1.2 percent to end the day at 32,396.17.

The broad-based S&P 500 shed 0.7 percent to close at 4,091.19, while the tech-rich Nasdaq Composite Index declined 0.2 percent to 12,348.76.

Among individual companies, Caterpillar slumped 5.8 percent after it announced better-than-expected profits but pointed to supply chain problems and the strong dollar as headwinds.

Uber surged 18.9 percent as it reported quarterly revenue more than doubled to $8.1 billion amid strong demand for the company’s ride-hailing and food delivery services.

JetBlue Airways tumbled 6.4 percent after results showed a $151 million quarterly loss amid higher fuel and labor costs. The report comes on the heels of positive earnings by other leading carriers and after JetBlue announced plans to acquire Spirit Airlines for $3.8 billion.

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Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.

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