NEW YORK, New York – The rally on Wall Street continued Thursday – for a while. Then as Treasury yields jumped on fears the Fed will implement interest rate rises more quickly, and more substantively, stocks peeled away gains, and in the end finished sharply lower.

“Although we expect inflation to peak very soon, if it hasn’t already done so, continued supply chain disruptions and a slow increase in labor force participation due to retirements and continued concerns over Covid, could easily keep the inflation rate more than double the Fed’s 2% target,” CNBC reported Joseph Kalish, chief global macro strategist at Ned Davis Research as saying in a note.

“As a result, the Fed may need to hike rates more than the peak 3.25% to 3.50% range currently priced into the markets a year from now,” he said.

Adding to the souring of sentiment, the 10-year U.S. Treasury yield was hiked up to 2.9 percent Thursday, nearly double the 1.5 percent at the start of the year.

The Nasdaq Composite was the worst-hit index, falling 278.41 points or 2.07 percent to 13,174.65.

The Dow Jones sank 368.03 points or 1.05 percent to 34,792.76.

The Standard and Poor’s 500 slid 65.79 points or 1.48 percent to 4,373.66.

The U.S. dollar reversed recent losses and went on the offensive Thursday. The euro retreated to 1.0840 around the New York close. The British pound slumped to 1.3029. The Japanese yen fell to 128.27. The Swiss franc dived to 0.9528.

The Canadian dollar declined to 1.2576. The Australian and New Zealand dollars were sharply lower at 0.7374 and 0.6734 respectively.

In Paris, France, shares rallied. The CAC 40 added 1.36 percent. The Dax in Germany gained 0.98 percent. London’s FTSE 100 fell 0.02 percent.

China’s Shanghai Composite tumbled 71.24 points or 2.26 percent to 3,079.81.

In Hong Kong, the Hang Seng declined 262.45 points or 1.25 percent to 20,682.22.

The biggest gainer in Asia Thursday was Japan’s Nikkei 225 which shot up 335.21 points or 1.23 percent to 27,553.06.

In New Zealand, the S&P/NZX 50 fell 12.19 points or 0.10 percent to 11,954.00. Stats NZ earlier Thursday revealed that annual inflation as measured by the country’s CPI index, rose 6.90 percent in the March quarter, the biggest increase in more than thirty years.

South Korea’s Kospi Composite edged up 9.52 points or 0.35 percent to 2,728.21.