US close: S&P 500 snaps best streak in two years after Powell remarks

The S&P 500 finished 0.8% lower at 4,347, having risen 6.5% since hitting a five-month low of 4,117 on 27 October. This eight-day run was the index's longest streak since November 2021. The Dow Jones Industrial Average fell 0.7%, while the Nasdaq dropped 0.9%.

"While operating in a macro news vacuum, stocks traded lower as investors were left dodging higher US yields after a rough long bond sale and a rare rally pushback from chair Powell," said Stephen Innes, managing partner at SPI Asset Management.

In a scheduled speech, Fed chair Jerome Powell said higher rates could be necessary if inflation doesn't come down towards the target.

"We know that ongoing progress toward our 2% goal is not assured. Inflation has given us a few head fakes," he said, adding: "If it becomes appropriate to tighten policy further, we will not hesitate to do so."

Commenting on Powell's remarks, Innes said: "Powell makes it abundantly clear that the Fed is carefully balancing the risk that inflation could reignite against the risk that the central bank could cause unnecessary economic damage. Hence, the Fed appears to be still erring on the side of doing too much versus too little. And this can potentially sink all boats as rate cut probability vaporises along the curve."

Market sentiment was further dampened after a $24bn sale of 30-year Treasuries went worse than expected, drawing weak demand.

Economic data was thin on the ground on Thursday. The only major release was data jobless claims, which fell by 3,000 to 217,000 in the week to 3 November, more or less in line with expectations.

Meanwhile, the yield on a 10-year US Treasury rose 13 basis points to 4.635%, having dropped to the 4.5% level on Wednesday.

Disney outperforms

Disney's share price jumped 7% after fourth-quarter earnings came in ahead of estimates and subscribers of its streaming services surpassed 150 million. Adjusted earnings per share jumped 173% to 82 cents, ahead of the 71 cents expected by the market, though a 5% increase in revenue to $21.24bn was slightly under the $21.37bn estimate.

Nevertheless, the stock was further helped by the news that Hollywood studios have finally reached an agreement with SAG AFTRA. Paramount and Warner Bros Discovery also gained, even though the latter missed forecasts with its quarterly results.

Ride-hailing platform Lyft dropped 6% despite beating expectations for its third quarter on both sales and profits, with market chatter pointing to comparisons with rival Uber whose growth has been far superior this year.