- GameStop jumps after chairman picks up more shares
- Adobe falls on lackluster current-quarter forecast
- Indexes: Dow -0.67%, S&P -0.58%, Nasdaq -0.81%
March 23 (Reuters) - U.S. stock indexes slid on Wednesday as oil prices rose and megacap shares fell, while investors assessed the outlook for U.S. interest rates following calls from Federal Reserve policymakers for bigger increases.
Nine of the 11 major S&P sectors were down in early trading, with technology, consumer discretionary and financial shares declining the most after fueling a sharp Wall Street rally in the previous session.
Amazon.com, Alphabet Inc, Meta Platforms and Microsoft Corp lost between 0.7% and 1.1%.
Energy stocks the best-performing S&P sector so far this year, resumed their march higher after taking a breather on Tuesday. Occidental Petroleum led the gains, up 3.5%, as Brent crude climbed above $120 a barrel.
"Oil prices being higher, taking profits from yesterday's advance and I think investors just are uncertain as to what is the direction of the market right now," said Sam Stovall, chief investment strategist of CFRA Research in New York.
"I would say uncertainty fosters a lack of conviction or vice versa. Investors are looking at the market and trading more from a short-term perspective."
St. Louis Fed President James Bullard on Tuesday called for raising interest rate to 3% this year, while Cleveland Fed chief Loretta Mester said big rate hikes will probably be needed at "some" of the remaining six Fed meetings this year.
The hawkish pivot was in line with Chair Jerome Powell's comments on Monday and came just a week after the U.S. central bank raised interest rates for the first time since 2018.
Traders now see the federal funds rate rising to the 2.25%-2.5% range by year-end, higher than the 1.9% suggested by Fed forecasts last week, raising concerns that a sharp rise in rates over a short period of time could hurt economic growth.
"The problem is that growth is already expected to slow down quite significantly. There's very high inflation and the sort of work that type of below trend growth without causing a recession is going to be extremely challenging," said Andrea Cicione, head of strategy at TS Lombard.
"So the risk of a policy mistake where the Fed tightens too aggressively and ends up pushing the economy into recession is growing."
At 10:11 a.m. ET, the Dow Jones Industrial Average was down 233.21 points, or 0.67%, at 34,574.25, the S&P 500 was down 26.08 points, or 0.58%, at 4,485.53, and the Nasdaq Composite was down 114.52 points, or 0.81%, at 13,994.30.
Meanwhile, NATO called on China to condemn Russia's invasion of Ukraine and warned against the war in Ukraine sliding into a nuclear confrontation between Moscow and the West.
GameStop Corp which was at the heart of the meme stocks rally last year, jumped 11.5% after Chairman Ryan Cohen's investment company bought 100,000 shares of the videogame retailer.
Adobe Inc fell 7.5% after it forecast downbeat second-quarter revenue and profit and warned of a hit to its digital media business in Ukraine.
Declining issues outnumbered advancers for a 2.25-to-1 ratio on the NYSE and for a 2.72-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and two new lows, while the Nasdaq recorded 20 new highs and 29 new lows.
Reporting by Devik Jain and Amruta Khandekar in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel