Economic Insider

Wall Street Concludes Lower Trades as Powell Pushes 50 BPS Rate Increase on Table

Wall Street

Photo: Unsplash. On Thursday, Wall Street saw lower trading, with Nasdaq falling over 2%. Investors responded to Federal Reserve officials. like Chair Jerome Powell suggesting additional signposting of a hawkish interest rate increase this year. 

A likelihood of a half-point interest rate hike will be “one the table”. on the May 3 – 4 meeting of the US central bank to grant the next. what is forecasted to be a chain of rate hikes this year, said Powell. 

As inflation runs the 2% target of the Fed thrice “it is appropriate to be moving a little more quickly,” . Powell further stated in a talk about the global economy at the International Monetary Fund meetings. 

“The market is pricing in at least 50 basis points in May and June,”. stated the head of trading at DWS Group, George Catrambone. “Powell, and many other Fed speakers, have been saying they want to get to control as quickly as possible. that is saying to the market that they are going to go aggressively.” 

San Francisco Federal Reserve President Mary Daly said Thursday. she agrees to increase the US central bank’s target for overnight borrowing costs to 2.5%. However, the extent of the hike will depend on the performance of the inflation and labor markets. 

Comments from Fed officials snatched initial momentum, which the market has acquired from positive gains. All three leading indexes opened at high levels, bolstered by solid outcomes from Tesla and airline companies. 

But earnings were worn down during the morning session. the S&P 500 and Nasdaq had already run the opposite path by the time Powell talked. 

The Dow Jones Industrial Average dropped 368.03 points, or 1.05%, to 34,792.76;. the S&P 500 fell 65.79 points, or 1.48%, to 4,393.66;. the Nasdaq Composite lost 278.41 points, or 2.07%, to 13,174.65. 

High-growth stocks such as those of Alphabet Inc and Amazon.com Inc dropped as investors were concerned about the effect of the higher rate environment on the future growth potential. For example, Meta Platforms Inc fell 6.2%, with its losses reaching 13.5% in the last two days.

Opinions expressed by Economic Insider contributors are their own.

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