The three main indices of wall street closed lower on Thursday, reversing earlier gains, as Federal Reserve officials, including Chairman Jerome Powell, offered more signs of aggressive rate hikes this year.
A half-point interest rate hike will be “on the table” when the central bank meets on May 3-4, he said. Powellin what is expected to be a series of hikes in the cost of credit this year.
With inflation roughly triple the Fed’s 2% target, “it’s appropriate to move a little faster,” he added. Powell in a discussion of the global economy at meetings of the International Monetary Fund.
“The market is pricing in at least 50 basis points in May and June,” said George Catrambone, chief operating officer of DWS Group. “Powell and many others in the fed They’ve been saying they want to get control as quickly as possible, and that’s telling the market that they’re going to act aggressively.”
Earlier on Thursday, the president of the fed of San Francisco, Mary Daly, said she supports raising the target for overnight borrowing costs to 2.5% by the end of this year, but whether or how much more will need to be increased will depend on what happens with inflation and markets. labor.
The comments of the officials of the fed they curbed the initial boost markets received from encouraging corporate earnings. All three major indices opened higher, buoyed by strong results from the heavyweight Tesla and airline operators.
However, gains eroded during the morning session and the S&P 500 yel Nasdaq they had already changed course when Powell I speak.
The S&P 500 lost 65.79 points, or 1.48%, to 4,393.66 units, while the Nasdaq Composite it fell 278.42 points, or 2.07%, to 13,174.65 units. The Dow Jones Industrial Average it fell 368.03 points, or 1.05%, to 34,792.76 units.
High-growth stocks, including Meta Platforms Inc., Alphabet Inc. Y Amazon Inc. fell as investors worried about how the higher rate environment would affect their future growth potential.
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