Market Snapshot: Dow closes down 1000 points, Nasdaq falls 3.9% after Powell warns of pain to households in inflation battle

by | Aug 26, 2022 | Stock Market

U.S. stocks tumbled Friday, with the Dow Jones Industrial Average closing down more than 1000 points for its worst daily percentage drop since May, after Federal Reserve Chair Jerome Powell said the central bank will continue its battle against inflation “until the job is done” of getting the cost of living back to its 2% target. See: Fed’s Powell, in blunt remarks at Jackson Hole, says bringing down inflation will cause pain to households and businesses

How did stocks trade?
The Dow Jones Industrial Average
DJIA,
-3.03%
plunged 1008.38 points, or 3%, to close at 32,283.40, in its largest percentage drop since May 18.

The S&P 500
SPX,
-3.37%
dropped 141.46 points, or 3.4%, to finish at 4,057.66, in its biggest percentage decline since June 13.

The Nasdaq Composite
COMP,
-3.94%
tumbled 497.56 points, or 3.9%, to end at 12,141.71, in its largest percentage drop since June 16.

For the week, the Dow sank 4.2%, while the S&P 500 shed 4% and the Nasdaq lost 4.4%. All three benchmarks booked a second straight week of losses, according to Dow Jones Market Data. What drove the market? U.S. stocks tumbled Friday, with losses led by the technology-heavy Nasdaq Composite, after the Federal Reserve Chair Jerome Powell reiterated his resolve to bring soaring inflation under control through higher interest rates. In remarks that were more hawkish than many investors anticipated, Powell tried to dispel any hopes for a less-aggressive monetary policy stance by insisting that the central bank will persist in its inflation fight, even if that means causing some near-term economic pain for American families. “Reducing inflation is likely to require a sustained period of below-trend growth,” Powell said. “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.” As U.S. stocks dropped Friday, the S&P 500’s information-technology
IUIT,
,
communication-services
SP500.50,
-3.86%
and consumer-discretionary sectors
SP500.25,
-3.88%
were hardest hit, FactSet data show. Tech plunged 4.3% while the other two areas each sank 3.9%, as growth stocks suffered more than value. “It feels like investors have literally been a …

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