US equities drop on interest rate worries

Stocks fell for a third day on Tuesday, jeopardizing a summer comeback rally, as the Federal Reserve and other global central bankers continued to send hawkish signals to fight inflation despite the negative consequences for economic growth or the impact on corporate earnings.

The S&P 500 fell 1.1% to 3,986.16, falling below the 4,000 level for the first time since July. The Nasdaq Composite lost 1.1%, to close at 11,883.14. Meanwhile, the Dow Jones Industrial Average slid 308.12 points, or nearly 1%, to 31,790.87.

The declines comes following comments by ECB policymaker and Estonian central bank Governor Madis Muller who reiterated that the central bank could discuss a 75-basis-point rate hike in September given exceptionally high inflation.

Investors are coming to terms with the idea that the Fed is serious about curbing inflation, even as recent data suggests inflation is starting to drop.