Technology stocks took a beating Tuesday after Federal Reserve Governor Lael Brainard said “stronger action” may be needed to put a lid on inflation and investors continued to monitor developments out of Ukraine.
The tech-heavy Nasdaq index tumbled 328.39 points, or 2.3 percent, to close at 14,204.17. The Dow Jones industrial average shed 280.70 points, or 0.8 percent, to end at 34,641.18. The broader S&P 500 index fell 57.52 points, or 1.3 percent, to settle at 4,525.12.
Geopolitical tensions remained front of mind for investors. The Treasury Department on Monday prohibited Russia from withdrawing funds held in American banks to pay its debt obligations, a major escalation aimed at forcing the Kremlin to pick between a catastrophic default and other difficult economic measures. Meanwhile, the Biden administration is expected to unveil more sanctions against Russia, The Post reported Tuesday, in coordination with the G-7 and the European Union.
Oil prices fell in volatile trading, with West Texas intermediate crude sliding 2.4 percent to just under $101 a barrel and Brent crude sinking 2 percent to $105. Though oil prices have pulled back since the early days of the invasion, they remain at elevated levels. Fuel prices have followed a similar trajectory: A gallon of gas is nearly seven cents cheaper than last week, according to AAA, with the national average near $4.18 on Tuesday. But that’s still 25 cents higher than last month and $1.30 more than last year.
Stocks appeared to be reacting to comments Brainard made at a Minneapolis Fed discussion Tuesday, which turned the spotlight back to interest rates and the central bank’s efforts to control inflation.
The Fed already has signaled plans to raise interest rates in successive 0.25 percent increments this year. But Brainard’s comments suggest that some hikes could be larger. “The Committee is prepared to take stronger action if indicators of inflation and inflation indicate that such action is warranted,” she said, according to prepared remarks.