(Image Source: La Presse)
Wall Street, the US Central Bank yesterday raised interest rates by half a percentage point as expected
Wall Street records its worst session of the year, with investors reviewing the excitement sparked by yesterday’s announcements Fed and turn the sentiment upside down. The Nasdaq archives the third biggest loss of points ever, after the ‘black’ sessions of 12 and 16 March 2020, at the beginning of the Covid pandemic. The Dow Jones leaves 3.12% on the ground at 4,152.38 points (with a daily loss of 1,033.07), the S&P 500 loses 3.44% to 4,152.38 points and the Nasdaq sinks to -4.99% at 12,317.69 points.
Investor sentiment worsened in the face of fears that the Federal Reserve’s interest rate hike will not be enough to tame the record spike in inflation. All three major Wall Street indices erased the gains made during yesterday’s rally.
The megacaps technological collapsed, including Alphabet (-4.71%), Apple Inc (-5.57%), Microsoft Corp (-4.36%), parent company of Google, Meta Platforms (-6.77%), Tesla (-8.33%) and Amazon.com (-7.56%). However, it was not just high-growth stocks that fell, the ones that struggled in 2022 due to the prospect of rate hikes that question their potential future earnings. The selloff hit all areas of the market.
“Investors aren’t looking at fundamentals (like earnings) right now, and that’s more of a sentiment issue,” he said. Megan Hornemanchief investment officer of Verdence Capital Advisors.
The US central bank yesterday raised interest rates by half a percentage point as expected and President Jerome Powell explicitly ruled out a increase of 75 basis points in a future meeting. Traders, however, raised their bets today by a 75 basis point hike at the June meeting. Concerns about Fed policy moves, mixed earnings from some big growth companies, the conflict in Ukraine and the lockdown related to the pandemic in China have recently hit Wall Streetovershadowing a better-than-expected quarterly season.
