US stocks close at lowest since June, Treasury yields spike on hawkish Fed

US stocks close at lowest since June, Treasury yields spike on hawkish Fed

Wall Street experienced a significant decline on Thursday due to concerns that the Federal Reserve’s monetary policy will remain restrictive for a longer period than expected. All three major U.S. stock indexes fell by more than 1%, and U.S. Treasury yields reached a 10-year high following Fed Chairman Jerome Powell’s warning about inflation. Interest rate-sensitive megacaps, including, Nvidia Corp, Apple Inc, and Alphabet Inc, dragged down the S&P 500 and Nasdaq to their lowest levels since June.

The Federal Reserve left the Fed funds target rate unchanged at 5.25%-5.50% as expected, but revised economic projections indicated that interest rates will remain elevated through next year. This dampened hopes for a policy easing before 2025. Thomas Martin, Senior Portfolio Manager at GLOBALT, expressed concerns about the impact of higher rates on the economy and the potential for a lack of a soft landing.

An unexpected 9% drop in initial U.S. jobless claims, reaching the lowest level in eight months, supported the Fed’s belief that the labor market is tight and the economy can withstand higher rates. The phrase “higher for longer” has become a common credo among the central banks of major economies as they tighten policies to combat inflation.

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all experienced significant declines. All 11 major sectors of the S&P 500 also suffered losses, with real estate stocks experiencing their largest one-day percentage drop since March. Semiconductor firm Broadcom slid following a report that Google executives discussed replacing the company as a supplier of AI chips. The Philadelphia chip index also declined.

FedEx, on the other hand, saw a 4.5% increase in its shares after delivering a better-than-expected profit. Fox Corp and News Corp experienced gains following the news of Rupert Murdoch stepping aside as chairman.

Declining issues outnumbered advancing ones on the NYSE, and the S&P 500 and Nasdaq Composite recorded new highs and lows. The volume on U.S. exchanges was higher than the average for the last 20 trading days.

Overall, Wall Street’s sell-off was driven by concerns about the Federal Reserve’s monetary policy and its potential impact on the economy. The unexpected drop in jobless claims provided some support, but the market remained cautious.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

Have a tip we should know?

Most Read

  1. News
    Pandora Papers Financial Leak Shows Us the Secrets of the World’s Rich and Powerful
    3 years ago
  2. Health
    US Supreme Court Rejects J & J TALC Cancer Case Appeal
    3 years ago
  3. Lifestyle
    9 Habits that Drain your Daily Focus and How to Avoid Them
    3 years ago
    Women’s Demand for Shapewear – the big Trends
    3 years ago
    Valentino Launches its Cosmetics Line
    3 years ago
  6. Health
    US Promises to Share 60 million Doses of AstraZeneca Vaccines
    3 years ago
  7. Health
    UK Offers Aid Amid Surging COVID-19 Cases in India
    3 years ago
  8. Sports
    Thousands of fans welcome Charlton funeral cortege at Old Trafford
    6 months ago
  9. News
    Brit left fighting for life after train derails in Argentinia
    6 months ago
    Dubai faces down airline rivals with $50 bln jet orders
    6 months ago
  11. Sunak
    UK’s Sunak brings back Cameron, sacks Braverman
    6 months ago
  12. Sports
    Man United’s Hojlund, Eriksen withdrawn from Denmark team duty
    6 months ago
  13. Health
    Autumn Sneezing Syndrome is on the rise… here’s what you can do
    6 months ago
  14. Canada
    Canada beat Italy to win Billie Jean King Cup for first time
    6 months ago

Follow @rushhourdaily: