LISTEN TO WHAT THEY’RE SAYING:
S&P 500: The most widely-used measure of the U.S. stock market fell for a second day and was down almost 300 points.
Nasdaq: Stocks were down for a third day.
The selling picked up after an announcement from S&P Dow Jones Indices that it decided to split the stocks of companies that decide to split their businesses into different companies.
NEW YORK (CNNMoney) – The S&P 500 slid into a second straight day of heavy losses as concern over an upcoming decision from the U.S. Federal Reserve sent investors scurrying for the exits.
The so-called FANG stocks — Facebook, Amazon, Netflix and Google parent Alphabet — took the hardest hit. Those tech stocks account for 16% of the S&P 500, making them a mainstay of the index.
An announcement from S&P Dow Jones Indices that it decided to split the stocks of companies that decide to split their businesses into different companies added to the downward pressure.
A much-anticipated Federal Reserve interest rate decision due out Thursday is also weighing on sentiment.
“Risks are rising that the Fed will maintain a fairly dovish stance Thursday morning,” said Alan Gayle, director of asset allocation at RidgeWorth Investments.
A decision Thursday isn’t expected to lead to major market moves. But investor concerns about future rate hikes will likely remain, he said.
“That’s what markets fear the most, rising interest rates which would make current growth more difficult,” Gayle said.
Worries that a policy-tightening economy and rising interest rates could cause markets to retreat add to the uncertainty of a presidential election still a few months away.
A low number of companies say they plan to split their businesses into different companies. Just 2.3% of companies that make up the S&P 500 intend to split up, according to Standard & Poor’s.
The drop followed a rocky session on the last trading day of the week, when stocks had their first daily gains in five trading days.
Apple and Alphabet, two of the most popular stocks in the Nasdaq index, weighed on other high-flying tech stocks. Amazon and Microsoft also finished lower.
Despite Wednesday’s selling, the S&P 500 is up about 5% this year. The Dow is about 3% higher, and the Nasdaq has risen 11%.
(CNNMoney’s David Goldman contributed to this report.)
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