U.S. stocks fell on Thursday, putting the longest win streak for the S&P 500 index in two years on the line, after a Treasury auction went poorly and Federal Reserve Chairman Jerome Powell said interest rates might not yet be high enough. The Dow Jones Industrial Average DJIA was down 188 points, or 0.5%, near 33,926 in the final hour of trade. The S&P 500 index SPX was 0.7% lower and the Nasdaq Composite Index COMP was down 0.9%, according to FactSet. Fed Chair Powell said uncertainty remains around if the central bank’s policy rate at a 22-year high is enough to bring falling inflation down to its 2% target, in a sustainable way, in a speech at the International Monetary Fund. The 10-year Treasury yield BX:TMUBMUSD10Y was up 11 basis points to 4.63%, but still below its recent 5% high. Higher longer-duration bond yields can hurt economic activity by making borrowing too costly, which may work toward the Fed’s inflation goal. But the fear is that higher rates also could go too far and spark a recession.
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