New York: US stock Shares fell for a third straight session and suffered a second straight week of losses on Friday as fears continued to mount that the Federal Reserve’s campaign to curb inflation would tip the economy into recession.
Shares have faltered since the US central bank’s decision to hike interest rates by 50 basis points (bps), as expected. but from comments irrigated Chair Jerome Powell signaled further policy tightening, and the central bank forecast interest rates would top the 5% mark in 2023, a rate not seen since 2007.
Further comments from other Fed officials fueled concern. New York Fed President John Williams said on Friday that it is possible the US central bank will raise rates more than he expected next year. The policymaker said he does not anticipate a recession due to the Fed’s aggressive tightening.
In addition, San Francisco Federal Reserve Bank President Mary Daly said it is “reasonable” to believe that once the Fed’s policy rates reach their peak, they could remain there through 2024.
“It looks like the market is finally starting to understand that bad news is bad news, and that is starting to happen. Since the October bottom, the market has continued to price what I consider a substantial amount of optimism. The fact is the Fed can navigate and pilot a successful soft landing, said Dave Wagner, equity analyst and portfolio manager at Aptus Capital Advisors in Cincinnati.
“Finally, the market is taking the view that bad news must mean bad things for the market.”
Dow Jones The Industrial Average fell 281.76 points, or 0.85%, to 32,920.46; The S&P 500 lost 43.39 points, or 1.11%, to 3,852.36; And this nasdaq The Composite closed down 105.11 points, or 0.97%, at 10,705.41.
For the week, the Dow was down 1.66%, the S&P down 2.09% and the Nasdaq down 2.72%.
Money market bets show at least two 25 bps rate hikes next year and a terminal rate of around 4.8% by mid-year before falling to around 4.4% by the end of 2023.
On the economic front, a report showed US business activity contracted further in December as new orders fell to their lowest level in only 2-1/2 years, although a slump in demand helped ease inflation.
The tech-heavy Nasdaq closed below its 50-day moving average on Thursday, a key technical level seen as a sign of momentum. The S&P also closed below its 50-day moving average on Friday.
The potential for a “Santa Claus rally”, or year-end rally, in markets has waned this year as most global central banks adopted tighter policies. The Bank of England and the European Central Bank were the most recent to signal an extended rate-hike cycle on Thursday.
The market pared losses in the last hour of trading, however, possibly due to the simultaneous expiration of stock options, stock index futures and index options contracts, known as triple witching, which can increase market volatility. .
Each of the 11 major S&P 500 sector indexes was in the red, led by real estate stocks falling as much as 2.96%.
Meta Platforms Inc gained 2.82%, while Adobe Inc gained 2.99% after JPMorgan upgraded the stock from “neutral” to “overweight” after the Photoshop maker reported first-quarter earnings above expectations. Estimated profits.
Exact Sciences Corp rose 16.39% after rival Guardant Health Inc’s cancer trial failed to meet expectations, while General Motors Co lost 3.91% after its robotaxi unit Cruise failed a safety investigation by US auto safety regulators. had to face
Volume on US exchanges stood at 17.28 billion shares compared to the x.xx billion average for the entire session over the past 20 trading days.
Issues declining compared to issues advancing on the NYSE by a 2.47-to-1 ratio; On the Nasdaq, a 1.66-to-1 ratio favored declines.
The S&P 500 posted a new 52-week high and 18 new lows; The Nasdaq Composite recorded 79 new highs and 392 new lows.
Shares have faltered since the US central bank’s decision to hike interest rates by 50 basis points (bps), as expected. but from comments irrigated Chair Jerome Powell signaled further policy tightening, and the central bank forecast interest rates would top the 5% mark in 2023, a rate not seen since 2007.
Further comments from other Fed officials fueled concern. New York Fed President John Williams said on Friday that it is possible the US central bank will raise rates more than he expected next year. The policymaker said he does not anticipate a recession due to the Fed’s aggressive tightening.
In addition, San Francisco Federal Reserve Bank President Mary Daly said it is “reasonable” to believe that once the Fed’s policy rates reach their peak, they could remain there through 2024.
“It looks like the market is finally starting to understand that bad news is bad news, and that is starting to happen. Since the October bottom, the market has continued to price what I consider a substantial amount of optimism. The fact is the Fed can navigate and pilot a successful soft landing, said Dave Wagner, equity analyst and portfolio manager at Aptus Capital Advisors in Cincinnati.
“Finally, the market is taking the view that bad news must mean bad things for the market.”
Dow Jones The Industrial Average fell 281.76 points, or 0.85%, to 32,920.46; The S&P 500 lost 43.39 points, or 1.11%, to 3,852.36; And this nasdaq The Composite closed down 105.11 points, or 0.97%, at 10,705.41.
For the week, the Dow was down 1.66%, the S&P down 2.09% and the Nasdaq down 2.72%.
Money market bets show at least two 25 bps rate hikes next year and a terminal rate of around 4.8% by mid-year before falling to around 4.4% by the end of 2023.
On the economic front, a report showed US business activity contracted further in December as new orders fell to their lowest level in only 2-1/2 years, although a slump in demand helped ease inflation.
The tech-heavy Nasdaq closed below its 50-day moving average on Thursday, a key technical level seen as a sign of momentum. The S&P also closed below its 50-day moving average on Friday.
The potential for a “Santa Claus rally”, or year-end rally, in markets has waned this year as most global central banks adopted tighter policies. The Bank of England and the European Central Bank were the most recent to signal an extended rate-hike cycle on Thursday.
The market pared losses in the last hour of trading, however, possibly due to the simultaneous expiration of stock options, stock index futures and index options contracts, known as triple witching, which can increase market volatility. .
Each of the 11 major S&P 500 sector indexes was in the red, led by real estate stocks falling as much as 2.96%.
Meta Platforms Inc gained 2.82%, while Adobe Inc gained 2.99% after JPMorgan upgraded the stock from “neutral” to “overweight” after the Photoshop maker reported first-quarter earnings above expectations. Estimated profits.
Exact Sciences Corp rose 16.39% after rival Guardant Health Inc’s cancer trial failed to meet expectations, while General Motors Co lost 3.91% after its robotaxi unit Cruise failed a safety investigation by US auto safety regulators. had to face
Volume on US exchanges stood at 17.28 billion shares compared to the x.xx billion average for the entire session over the past 20 trading days.
Issues declining compared to issues advancing on the NYSE by a 2.47-to-1 ratio; On the Nasdaq, a 1.66-to-1 ratio favored declines.
The S&P 500 posted a new 52-week high and 18 new lows; The Nasdaq Composite recorded 79 new highs and 392 new lows.