Fed Comments On Inflation Send US Stocks Lower

US stock markets slid on Tuesday after Federal Reserve Chair Jerome Powell warned that the US central bank could hike rates more than expected to quash inflation.

The Dow Jones Industrial Average shed 1.7 percent to 32,856.

The S&P 500 shed 1.5 percent to 3,986, and the Nasdaq Composite Index dropped 1.3 percent to 11,530.

Investors now see a greater chance of a half-point interest rate increase at the Fed's next meeting following Powell's appearance, during which he told a Senate panel the Fed is prepared to accelerate the pace of interest rate hikes if strong economic data persists.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he said.

The US central bank has already raised its benchmark lending rate eight times since early last year, as it contends with inflation that remains stubbornly above its long-term target of 2 percent.

Quincy Krosby of LPL Financial said Powell is preparing the market for a more aggressive response depending on key jobs and pricing data in the coming days.

Powell "has a mandate to maintain price stability, and that is what he is focused on," Krosby said. "Everything he has said points to the fact that he is going to do what he has to do."

Among individual companies, Dick's Sporting Goods surged 11.1 percent as it reported a solid fourth quarter, including a 5.3 percent rise in comparable store sales.

Weight Watchers International soared nearly 80 percent after announcing the acquisition of Sequence Health, expanding its diet program to include telehealth services.

Spirit Airlines jumped 4.7 percent after the Justice Department filed a suit to block the company's takeover by JetBlue, citing antitrust concerns. JetBlue lost 2.9 percent. (AFP)