It was another down day for stocks, with Treasury yields climbing amid hawkish remarks from Federal Reserve officials and swaps pricing in a 5 per cent peak policy rate in 2023. The pound wavered after Liz Truss resigned as U.K. prime minister.

The wariness around economic challenges has been so pronounced that it doesn’t take much to see the S&P 500 dropping at least 1 per cent after posting a rally of the same magnitude earlier in the day. It happened again Thursday, with the gauge seeing intraday swings of that size in both directions for the 16th time in 2022 -- the most for any year since the financial crisis.

Volatility is showing no signs of abating ahead of Friday’s US$2 trillion options expiration and another raft of corporate earnings. In late trading, Snap Inc. plummeted after reporting its slowest quarterly sales growth ever, saying that a decline in advertising spending on the platform continues to drag on results.

A tech-led advance in equities quickly fizzled out Thursday after Philadelphia Fed chief Patrick Harker said policymakers are likely to raise rates to “well above” 4 per cent this year and hold them at restrictive levels, while leaving the door open to doing more if needed. The current benchmark sits between 3 per cent and 3.25 per cent. Fed Governor Lisa Cook also spoke, noting that rates will need to keep rising to get inflation under control.

“Stocks are not out of the woods yet,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “Fears over further tightening of central bank policy amid an environment of high-inflation and low-growth means investors will avoid buying stocks aggressively. Even at these relatively-inexpensive levels.”

Traders also scoured a mixed bag of quarterly results, with Tesla Inc.’s sales disappointing and International Business Machines Corp. topping forecasts. Several market observers said the bar has been lowered quite a bit ahead of the earnings season, boosting the odds of upside surprises. It’s also worth noting that there’s been no shortage of warning signals about the economy from the corporate side.

Alcoa Corp. joined metals higher, but its quarterly loss indicated a worsening environment for a company that recently said it was being squeezed by higher costs and falling aluminum prices. And that’s a dependable barometer of the health of sectors including construction, aerospace and consumer packaging. Another worrisome signal came from Union Pacific Corp., which sees slowing freight demand.

As traders wade through corporate results, “with an extra eye on guidance, expect volatility to remain elevated,” said Mike Loewengart at Morgan Stanley Global Investment Office.

The latest batch of economic reports didn’t provide much encouragement either, with sales of previously owned U.S. homes down for an eighth straight month -- underscoring how soaring mortgage rates are punishing the housing market. The stretch of declines is the longest since 2007, when a housing market collapse swept the economy into the Great Recession.

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.8 per cent as of 4 p.m. New York time
• The Nasdaq 100 fell 0.5 per cent
• The Dow Jones Industrial Average fell 0.3 per cent
• The MSCI World index fell 0.6 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1 per cent to US$0.9784
• The British pound was little changed at US$1.1227
• The Japanese yen fell 0.2 per cent to 150.15 per dollar

Cryptocurrencies

• Bitcoin fell 0.7 per cent to US$19,066.28
• Ether fell 0.8 per cent to US$1,284.5

Bonds

• The yield on 10-year Treasuries advanced nine basis points to 4.23 per cent
• Germany’s 10-year yield advanced three basis points to 2.40 per cent
• Britain’s 10-year yield advanced three basis points to 3.91 per cent

Commodities

• West Texas Intermediate crude rose 0.5 per cent to US$85.98 a barrel
• Gold futures fell 0.2 per cent to US$1,631.40 an ounce