NEW YORK – Wall Street stocks dropped on Wednesday, on concern about the deteriorating corporate earnings outlook amid worries the Federal Reserve will overdo its effort to counter inflation.
“There's a fear that they're going to keep rates too high for too long,” Mr Jack Ablin, of Cresset Capital, said of Wednesday's downcast session, in which equities traded in the red.
Briefing.com analyst Patrick O'Hare noted that the 12-month forecast for corporate earnings has fallen since analysts' estimates at the end of 2022.
The market “has gone a long way in a short amount of time, leaving it ripe for some profit-taking interest,” Mr O'Hare said.
“While the stock market has been trending higher since the start of the year, earnings estimates have been trending lower.”
The Dow Jones Industrial Average dropped 0.6 per cent to 33,949.01.
Among individual companies, Google parent Alphabet sank 7.4 per cent a day after Microsoft presented its new offerings in artificial intelligence. The drop reflects concerns that Google could lose its legacy advantage among search engines.
Microsoft dipped 0.3 per cent.
Uber Technologies jumped 5.5 per cent after reporting better than expected profits on strong demand for its ride-hailing services.
Oak Street Health jumped 4.6 per cent after it agreed to be bought by pharmacy chain CVS Health for US$10.6 billion (S$14 billion). CVS rose 3.5 per cent.