By Yasin Ebrahim
Investing.com -- The S&P 500 closed lower Wednesday, led by bank stocks as Treasury yields retreated after rising oil prices renewed worries about the inflation drag on global growth.
The S&P 500 fell 1.2%, the Dow Jones Industrial Average fell 1.3%, or 448 points, the Nasdaq slipped 1.3%.
Crude oil exports from Kazakhstan's Caspian Pipeline Consortium terminal, which are shipped via the Russian port of Novorossiysk, were suspended following weather-related disruptions, triggering fresh fears of supply shortages.
The move higher in oil prices returned focus to the threat higher inflation poses to global growth just as investors mull the prospect of the Fed hiking rates more aggressively at its meetings in May and June.
St. Louis Federal Reserve Bank President James Bullard reiterated on Wednesday the Fed needs to act "faster" on raising interest rates as inflation is "way over" the central bank's target.
The market currently expects the Fed to raise rates by 50 basis points at its May and June meetings.
The bets on a hawkish Fed exacerbated worries the Fed may overshoot of rate hikes and slow the economy into recession, triggering a fresh flight to safe heavens such as bonds.
Treasury yields, which trade inversely to prices, fell and weighed on bank stocks. Signature Bank (NASDAQ:SBNY), Wells Fargo (NYSE:WFC), First Republic Bank (NYSE:FRC) led the move lower.
Tech, which tends to benefit from the falling rates, was mostly in the red, though Apple (NASDAQ:AAPL) bucked the trend, to close up nearly 1% higher.
Apple’s iPhone 13 is seeing “stellar” demand globally, and likely “setting up for a monster growth cycle over the next 12 to 18 that is not baked into shares at current levels,” Wedbush said in a note.
Adobe Systems (NASDAQ:ADBE) fell as much as 9% after its software guidance overshadowed quarterly results that beat on both the top and bottom lines, and stoked fears about peaking growth.
“These results further support our thesis of peaking net new DM ARR, which we have believed would result in less forward upside to consensus estimates and drive decelerating revenue growth, which we anticipated will weigh on the stock’s performance,” Credit Suisse said in a note as it cut its price target on the stock to $525 from $625.
General Mills (NYSE:GIS), meanwhile, gained more than 2% after raising its full-year outlook following better-than-expected quarterly earnings.
Meme stocks remained on the comeback trail. GameStop (NYSE:GME) added 14% to its 30% gain a day earlier after GameStop Chair Ryan Cohen on Tuesday bought an additional 100,000 shares, expanding his stake in the video game retailer to 11.9%.
AMC Entertainment (NYSE:AMC) was up 14%.
In other news, Okta (NASDAQ:OKTA) fell 10% after confirming that a hacking group known as Lapsus$ had carried out a cyber attack, though said security protocols contained the hack.