By Bansari Mayur Kamdar, Sruthi Shankar and Amruta Khandekar
(Reuters) - Wall Street's three main indexes fell on Thursday after Federal Reserve Chair Jerome Powell said a 50-basis point interest rate hike was "on the table", cementing expectations of aggressive policy tightening by the U.S. central bank.
With inflation running roughly three times the Fed's 2% target, "it is appropriate to be moving a little more quickly," Powell said in a discussion of the global economy at the meetings of the International Monetary Fund. "50 basis points will be on the table for the May meeting."
High-growth stocks including those of Alphabet (NASDAQ:GOOGL) Inc and Amazon.com Inc (NASDAQ:AMZN) fell close to 2% each after yields on two-year bonds, the most sensitive to interest changes, hit their highest in three years. [US/]
"The market is starting to reprice risk and the way you're seeing that is obviously higher value stocks are getting hit the hardest," said Dennis Dick, a professional stock trader at Bright Trading LLC in Las Vegas.
All the three major indexes opened higher, boosted by strong results from heavyweight Tesla (NASDAQ:TSLA) and airline operators, but gave up gains by afternoon trading.
At 1:55 p.m. ET, the Dow Jones Industrial Average was down 54.61 points, or 0.16%, at 35,106.18, the S&P 500 was down 24.74 points, or 0.55%, at 4,434.71, and the Nasdaq Composite was down 127.42 points, or 0.95%, at 13,325.65.
Tesla, the world's most valuable automaker, rose 5.8% after its results beat Wall Street expectations as higher prices helped it overcome supply-chain chaos and rising costs.
United Airlines Holdings (NASDAQ:UAL) Inc and American Airlines (NASDAQ:AAL) Group Inc climbed 11.5% and 5.6%, respectively, after they predicted a return to profit in the current quarter due to booming travel demand.
Overall, analysts expect S&P 500 earnings growth of 7.3% in the first quarter, compared with the 32.1% rise in the fourth quarter, according to Refinitiv data.
Declining issues outnumbered advancers for a 2.36-to-1 ratio on the NYSE and a 2.43-to-1 ratio on the Nasdaq.
The S&P index recorded 76 new 52-week highs and 12 new lows, while the Nasdaq recorded 66 new highs and 283 new lows.