US Stocks: Wall St slides as strong factory data stokes aggressive rate hike concerns

US Stocks: Wall St slides as strong factory data stokes aggressive rate hike concerns

U.S. manufacturing activity picked up in May as demand for goods remains strong, a survey from the Institute for Supply Management showed, which could further allay fears of an imminent recession, but a measure of factory employment contracted for the first time in nearly a year.

The benchmark U.S. 10-year Treasury yield climbed to 2.93%, its highest in two weeks.

As part of the plan to combat inflation, the U.S. central bank on Wednesday will also begin trimming its $9 trillion balance sheet which it amassed to support the economy amid the COVID-19 pandemic.

"We think interest rates are going to continue to go up, so assuming the inverse of QE, we expect risky assets to come down and, generally, the reversal of a decade-plus of accommodative policies," said Paul Kim, chief executive officer of Simplify ETFs.

Investors will be watching comments from St. Louis Federal Reserve President James Bullard and New York Fed President John Williams later in the day for clues on the timeline of monetary policy tightening.

Uncertainty about the U.S. central bank's policy move, the war in Ukraine, prolonged supply chain snarls due to COVID lockdowns in China and higher Treasury yields have rocked stock markets, with the benchmark S&P 500