Market Snapshot: U.S. stocks modestly lower day after Fed’s third jumbo rate hike

by | Sep 22, 2022 | Stock Market

U.S. stocks traded lower on Thursday afternoon as Treasury yields and the dollar climbed further a day after the Federal Reserve delivered a third jumbo interest-rate hike and signaled more to come.What’s happening
The Dow Jones Industrial Average
DJIA,
+0.12%
fell 63 points, or 0.2%, to 30,123

The S&P 500
SPX,
-0.38%
was down 28 points, or 0.7%, at 3,762

The Nasdaq Composite
COMP,
-1.02%
shed 167 points, or 1.5%, to 11,051

Stocks finished sharply lower Wednesday after a volatile session, with the Dow Jones Industrial Average losing 522 points, or 1.7%, while the S&P 500 declined 1.7% and the Nasdaq Composite dropped 1.8%. The S&P 500 is down more than 21% for the year, and the Nasdaq Composite has lost roughly 29% over that period.

What’s driving markets U.S. stocks fell again following Wednesday’s selloff after the Federal Reserve produced another 75 basis-point rate hike and reiterated its commitment to crush inflation, even if it means driving the U.S. economy into a recession. “We will keep at it until the job is done,” Chair Jerome Powell said in a news conference on Wednesday after the Fed increased its policy interest rate for the third time in a row by 75 basis points to a range of 3% to 3.25%. “I wish there were a painless way to do that. There isn’t,” he added. Investors were rattled by the Fed’s so-called dot plot, which tracks forecasts of the benchmark interest rate from individual policy makers. It produced a median forecast for a peak fed-funds rate of 4.6% in 2023 — above market expectations. Fed forecasts also implied that unemployment may rise significantly and the economy slow sharply. See: Fed predicts big slowdown in economy and rising unemployment as it battles inflation “Powell failed to give the market the light at the end of the tunnel”, wrote Jeff Bierman, chief market technician at TheoTrade in emailed comments. “Even if he would have said 5% or 4.5%, the market would have calmed down because money managers would have an anchor datapoint. Instead, he left the market guessing once again, with no deadline for when the Fed will finish with QT.” Read: The stock market tumbled because Jerome Powell’s Fed ‘isn’t going to blink’ Bond yields surged to multi-year highs with the yield on the 2-year Trea …

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