Stocks sold off sharply Tuesday after comments from Federal Reserve Chair Jerome Powell suggested that rates may need to go higher for longer, fueling fears of a potentially larger hike at the central bank’s next policy meeting.

The Dow Jones Industrials sold off 574.98 points, or 1.7%, to close Tuesday at 32,856.46.

The S&P 500 fell 62.05 points, or 1.5%, to 3,986.37.

The NASDAQ Composite sank 145.4 points, or 1.3%, to 11,530.33.

The comments indicated that the Fed may consider a larger rate hike than last month’s 25-basis-point increase at its next policy meeting on March 21-22.

They also signaled a potential return to a half-point rate hike at central bank’s March meeting, depending on the strength of incoming economic data, according to Morgan Stanley.

At the same time, Powell’s remarks could mean that the peak rate for federal funds, also called the terminal rate, will likely go higher than previously expected, despite investor hopes that the Fed might stop hiking soon.

Investor attention remains laser-focused on February’s jobs report slated for Friday, after January’s blockbuster number showed a resilient labour market despite the Fed’s aggressive hiking.

Airline stocks bucked the broader market downtrend after the Justice Department sued to block JetBlue’s Spirit Airlines acquisition. The announcement reduced some investor fears that a combined airline would heighten competition. United Airlines shares were last up 3.5%. Delta and American gained about 2% each.

Jefferies is bullish on Oracle shares, saying that investors can “expect more tailwinds than headwinds” on the software company.

Jefferies set its price target to $105, implying 18% upside from Monday’s closing price. Oracle shares have gained almost 8% in 2023.

Prices for the 10-year Treasury moved slightly ahead, lowering yields to 3.97% from Monday’s 3.98%. Treasury prices and yields move in opposite directions.

Oil prices subsided $3.04 to $77.42 U.S. a barrel.

Gold prices stumbled $34.80 to $1,819.80 U.S. an ounce.

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