WASHINGTON (dpa-AFX) - After tumbling early in the session on Wednesday, stocks showed a significant recovery over the course of the afternoon before seeing substantial volatility late in the day.
The Nasdaq and S&P 500 reached positive territory going into the final hour of trading only to nosedive going into the end of the session.
The major averages all finished the day sharply lower, just off their worst levels. The Dow plunged 1,153.18 points or 2.2 percent to 51,594.14, the Nasdaq tumbled 433.97 points or 1.7 percent to 24,442.94 and the S&P 500 slumped 112.63 points or 1.5 percent to 7,316.15.
With the steep losses on the day, the Nasdaq dropped to a three-month closing low, while the Dow and the S&P 500 fell to their lowest closing levels in well over a month.
The late-day sell-off on Wall Street came as treasury yields surged in electronic trading on concerns about the outlook for interest rates even after the Federal Reserve left rates unchanged.
The Fed said it decided to maintain the target range for the federal funds rate at 3.5 to 3.75 percent, keeping rates unchanged for the fifth consecutive meeting.
The vote to leave rates unchanged was not unanimous, however, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan preferring to raise rates by a quarter point.
Stocks came under pressure early in the day amid a substantial rebound by crude oil prices, with U.S. crude oil futures soaring by more than 6 percent after plummeting by 14 percent over the three previous sessions.
Crude oil prices have spiked amid concerns about another re-escalation of the conflict between the U.S. and Iran after attacks were paused for several days.
U.S. Central Command said in a post on X that Iran launched multiple ballistic missiles in an attempted surprise attack on U.S. forces based in the Middle East on Tuesday. The missiles were successfully intercepted.
In a subsequent statement, Centcom said U.S. and Saudi Arabian forces conducted precision strikes in Iraq against Iran-aligned terrorists that the Islamic Revolutionary Guard Corps directed to attack U.S. forces and Saudi energy infrastructure.
U.S. and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours, Centcom said.
In response to the surprise attacks on U.S. forces in Jordan, President Donald Trump told a Fox News reporter the U.S. will be hitting Iran hard, adding, 'They're going to get a beating.'
Sector News
Semiconductor stocks saw substantial volatility along with the broader markets before ending the day sharply lower. The Philadelphia Semiconductor Index plummeted by 5.3 percent to its lowest closing level in three months.
Concerns about the outlook for interest rates also led to a sell-off by housing stocks, as reflected by the 4.3 percent nosedive by the Philadelphia Housing Sector Index.
Networking stocks also showed a significant move to the downside on the day, dragging the NYSE Arca Networking Index down by 4 percent to a three-month closing high.
Computer hardware, airline and banking stocks also ended the day notably lower, while oil stocks continued to turn in a strong performance amid the spiked by crude oil prices.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.5 percent, while Hong Kong's Hang Seng Index surged by 2 percent.
The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the German DAX Index closed just below the unchanged line and the French CAC 40 Index slid by 0.6 percent.
In the bond market, treasuries gave back ground after moving notably higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 1.8 basis points to 4.622 percent.
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