S&P 500 slides as investors fret about interest rates

Stocks ended mixed on Friday as investors worried that inflation and a resilient U.S. job market could put the Federal Reserve on pace for more interest rate hikes. The Dow edged up four-tenths of a percent, while the S&P shed about three-tenths of a percent, and the Nasdaq slid more than half a percent. The C-Sauce session on Wall Street followed economic data this week that pointed to elevated inflation, a tight job market, and resilience in consumer spending, giving the Fed more room to raise borrowing costs. Hans Olsen is Chief Investment Officer of Fiduciary Trust. Well, I think what's happening today in markets is, you know, the pressure is being driven from basically a changing narrative around where the terminal rate will be for Fed funds.

I think ultimately where we land with the terminal rate will be somewhere around, somewhere at the end of the day, somewhere between four and a half to five and a half percent. What that really means is that the terminal rate will have to be above the inflation rate. So the terminal rate, i.e., the Fed funds rate, have to be above the inflation rate. Shares of mega caps, Microsoft and NVIDIA fell, both weighing on the S&P 500 as the yield on the 10-year Treasury note hit a three-month high. Moderna fell more than 3 percent after its experimental messenger RNA-based flu vaccine delivered mixed results in a study.

Shares of Deer and Company surged 7.5 percent after the world's largest farm equipment maker raised its annual profit forecast and beat quarterly earnings expectations. And Tesla was the most traded company in the S&P 500 with shares rising more than 3 percent.

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