Update: Equities Fall Intraday, Yields Surge as Rate Hike Bets Grow

02:02 PM EDT, 09/23/2026 (MT Newswires) -- (Updates with latest market prices and developments.) US benchmark stock indexes fell intraday and bond yields surged as Federal Reserve Governor Michael Barr called for further interest rate increases to combat sticky inflation. The Nasdaq Composite was down 1.3% at 26,887.2 after midday Wednesday, while the S&P 500 dipped 0.8% to 7,701.3. The Dow Jones Industrial Average dropped 0.6% to 51,544.7. The Nasdaq recorded a new closing high for the second day in a row on Tuesday, while the Dow fell and the S&P 500 was little changed. Among sectors, utilities and consumer discretionary led the laggards on Wednesday, while energy saw the biggest gain. Treasury yields rose intraday, with the 10-year yield up 16.2 basis points at 5.129%, while the two-yield jumped 13.7basis points to 4.914%. Barr said "further policy adjustments" will likely be needed to ensure inflation comes down to the 2% target in a timely fashion. Last week, the Fed delivered its first rate hike in just over three years. "Risks to achieving our inflation target have increased, while risks to the labor market have receded," he said. "We needed to recalibrate monetary policy to reflect the balance of risks to our mandate goals." Markets are now pricing in a 71% probability that the Fed will lift interest rates again by 25 basis points in October, according to the CME FedWatch tool. That's up from 55% on Tuesday. Chinese leader Xi Jinping is expected to arrive in Washington later on Wednesday. Xi and US President Trump are expected to discuss trade, artificial intelligence and potentially the war in Iran. West Texas Intermediate crude oil was up 0.7% at $91.18 a barrel intraday, while Brent advanced 2.9% to $102.15. US private-sector output growth accelerated to a 62-month high in September even as price pressures intensified, S&P Global's (SPGI) flash purchasing managers' index showed Wednesday. In company news, Paychex (PAYX) shares were the worst performer on the S&P 500, down 7.4% intraday. The human resources software provider reported fiscal first-quarter revenue growth in line with market expectations, while management reiterated its full-year outlook amid a tough comparison in the ongoing three-month period. McDonald's (MCD) unveiled its NEXT strategy, setting new financial targets for the fast-food giant, including market share gains, restaurant efficiency and unit expansion to increase systemwide sales. The stock slumped 5.6%, the steepest drop on the Dow and among the biggest declines on the S&P 500. Cracker Barrel Old Country Store's (CBRL) fiscal fourth-quarter earnings increased year on year, partly driven by tariff refunds, while the restaurant chain's chief financial officer said its traffic trends were improving. The stock jumped 7.4%. Spot gold fell 1.9% to $4,278.77 per troy ounce, while silver shed 2.5% to $64.89 per ounce.