Stocks fall for a second day as rates jump, with the Fed set to tighten policy aggressively

Stocks dipped for a second day on Wednesday and rates soared to new heights as investors bet the Federal Reserve is about to aggressively tighten policy to fight inflation, and in turn slow the economy.

The Dow Jones Industrial Average traded 251 points lower, or 0.7%. The S&P 500 slid 0.8%, and the Nasdaq Composite pulled back by 1.3%.

Minutes from the Fed's most-recent meeting are slated for release Wednesday afternoon. The minutes come from last month's meeting when the central bank raised rates and indicated six more hikes were coming this year. Investors are bracing for new details about the Fed's plan to reduce its balance sheet after comments from Fed officials knocked down stocks on Tuesday.

The 10-year Treasury yield jumped above 2.65% on Wednesday, hitting a three-year high and continuing its rapid climb this week. The rate ended Monday at 2.40%.

Philadelphia Federal Reserve President Patrick Harker expressed concerns about rising inflation less than a day after Fed Governor Lael Brainard indicated support for higher interest rates and said a "rapid" reduction of the central bank's balance sheet could begin as soon as May. Following her remarks, the Dow pulled back by about 280 points and the Nasdaq Composite slid 2.3%.

"It is of paramount importance to get inflation down," Brainard said during a Minneapolis Fed webinar. Brainard has been nominated to be vice chair of the Federal Open Market Committee.

Harker said Wednesday he expects "a series of deliberate, methodical hikes as the year continues and the data evolve." San Francisco Fed President Mary Daly shared concerns about inflation on Tuesday.

Tech shares fell again on Wednesday following Tuesday's losses, as investors rotated out of the group and braced for higher rates to slow the economy. Chipmakers Nvidia and Marvell Technology continued their descent on Wednesday.

Tesla, Microsoft, and Amazon shares were also slated to fall more than 2% on Wednesday and Twitter shed 3% premarket after rallying this week amid news that Elon Musk purchased a large stake in the company. As the Federal Reserve hikes rates investors have begun rotating into stocks with stable profits and shying away from those offering future growth.

Investors continued to monitor the situation in Ukraine as both the European Union and the U.S. prepare to slap new sanctions on Russia after evidence emerged of alleged war crimes committed by its military. The sanctions would include a ban on Russian coal imports. (Click here for the latest.)

Crude prices, which have been volatile since the war began, rose again on Wednesday after dipping Tuesday. U.S. oil prices were up by 1% at $102.98 per barrel, while international benchmark Brent gained about 0.65% to trade at $107.33 per barrel.