US stock indexes closed sharply lower on Thursday and each of the major indexes suffered their largest daily percentage falls in weeks as fears mount that the Federal Reserve’s battle against inflation through aggressive interest rate hikes could lead to to a recession.
The US central bank hiked rates by 50 percentage points Wednesday as widely expected, shattering consecutive 75 percentage point hikes in its four previous meetings, but Fed Chair Jerome Powell warned that recent signs of inflation they weren’t enough to convince the government. Fed that the battle against rising prices has been won.
The Fed has forecast continued rate hikes above 5% in 2023, a level not seen since the sharp economic slowdown in 2007.
According to preliminary data, the S&P 500 lost 2.48% to 3,896.41 points. The Nasdaq technology index fell 3.19% to 10,814.68 points. The Dow Jones fell 2.22% to 33,211.90 points.
Money market participants expect at least two 0.25 percentage point hikes in the base rate over the next year and borrowing costs will peak at around 4.9% by mid-year before easing to around 4.4% by the end of 2023.
Investors also weighed in on Thursday’s economic data that showed a steeper-than-expected drop in retail sales in November and the number of US jobless claims down last week, an indication of a tighter job market. tense. The labor market will need to weaken to help reduce inflation.
All 11 major sectors of the S&P 500 were in negative territory. Communication services and technology stocks fell nearly 4% as the session’s worst performers.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
