Wall Street Continues Its Downward Trajectory For The Fourth Straight Day
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U.S. stocks continued their downward trajectory for the fourth consecutive day on Thursday after concerns about a further rate hike by the Federal Reserve. The expectations from investors were dashed after Fed Chair Jerome Powell hinted that a pause on the hike in rates is highly unlikely.
After the Federal Reserve’s statement on Wednesday, Powell commented that it was “very immature” to consider slowing the rate hikes. This did not sit down well with investors, as it affected several stocks and bond yields.
The Fed Could Continue With High Rates Increase
The recent economic data revealed that the labor market is still staying strong despite the economic indices that would have slowed things down. But there is a report that showed growth in the service sector last month. The Fed likely going to continue with the aggressive rate hike as it continues to keep inflation contained.
Partner at Cherry Lane Investments in New Jersey, Rick Meckler, said the Fed’s job is to keep inflation from getting out of hand. He said part of that job is also to maintain enough earnings that will support stock prices.
On Thursday, the S&P 500 lost 39.8 points to 3,719.89 while the Dow Jones Industrial Average dropped 146.51 points to close at 32,001. Additionally, the Nasdaq Composite dropped to 10,342 after shedding 181.86 points or 1.73%.
Most traders are looking at a possible hike of between 50 basis points and 75 basis points in December. But the peak Fed funds rate has climbed to at least 5%, unlike a previous rise of 4.50% – 4.75% range.
Technology Stocks Led The Losers Chart
Investors are also eyeing the nonfarm payrolls report expected on Friday for any signs that the recent report on the Fed rate is having an impact on slowing the economy.
Mega capitalization growth companies such as Apple Inc were also affected by the climb in yields. The stock lost 4.24% on the market while fellow technology company Alphabet Inc (Google) lost 4,07%. This represents the worst-performing sector on the stock exchange.
However, the Dow witnessed a slight balance in losses. Heavy equipment maker Caterpillar Inc surged by 2.20% while Industrials like Boeing Co witnessed an impressive increase of 6.34%.
