Dow closes more than 300 points lower as 10-year Treasury yield soars to another 16-year high: Live updates

“Markets are trying to figure out where rates are going to peak,” said Jamie Cox, managing partner at Harris Financial. “Markets want to see what happens when rates hit 5%.”

J.B. Hunt lost 8.9% in the session on the back of worse-than-expected earnings, while United Airlines tumbled 9.7% after delivering soft guidance. Morgan Stanley dropped 6.8% and notched its worst day since 2020 as a weak performance from the bank’s wealth management division overshadowed beats on both lines.

On the other hand, Procter & Gamble rose 2.6% after beating analyst expectations for the quarter. Investors are now looking to Netflix and Tesla earnings expected after the bell on Wednesday.

Just over 10% of companies in the S&P 500 have reported results, according to FactSet. Of those that have already reported, about 78% have surpassed analyst expectations.

Charles Schwab senior investment strategist Kevin Gordon said the market focus is shifting to revenue growth this earnings season. He added that investors are trying to decipher which companies are seeing increased demand and which are boosting their earnings through cost-cutting measures alone.

“We’re at a point in the cycle now where companies really need to start showing actual demand coming back online,” he said. “If that’s not the case, then you’re probably not going to get as much of a lift as people were expecting.”

Chip stocks such as Nvidia and Advanced Micro Devices struggled for a second session as investors continued selling off. The moves came after the U.S. Department of Commerce announced plans to tighten restrictions on the sale of advanced artificial intelligence chips to China on Tuesday.

Wall Street also continued to assess the impact of the ongoing Israel-Hamas war. U.S. President Joe Biden visited Israel on Wednesday as part of a trip aimed at showing solidarity with the country.