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Stock Market Today: Dow Slides as Focus Shifts to Hawkish Fed

AuthorYasin Ebrahim
Published 09/20/2022, 04:00 PM
Updated 09/20/2022, 04:08 PM
© Reuters.

By Yasin Ebrahim

Investing.com -- The Dow fell Tuesday, as investors upped their bearish bets on stocks on fears that the Federal Reserve may signal that aggressive rate hikes will likely continue.

The Dow Jones Industrial Average slipped 1%, or 312 points, the Nasdaq was down 0.95%, and the S&P 500 fell 1.2%.

The Fed kicked off its two-day meeting on Tuesday, and many expect that a decision to raise rates 0.75% will likely be announced and followed up with guidance that will show the central bank’s willingness to persist with the front-loading of rate hikes to combat inflation.

The Fed’s willingness to keep on tightening monetary policy has returned focus toward the growing threat of an economic recession, or hard landing.

“Clearly the risk is stacked towards exacerbating the slowdown into a hard landing. That is by far the bigger risk at the moment, and it increases with every rate raise into this slowing growth environment,” Will Rhind, founder and CEO, GraniteShares told Investing.com in an interview on Tuesday.

The bond market, meanwhile, continued to signal the risk of a larger recession as ongoing inversion in a key part of the Treasury Yield curve deepened to levels not seen in more than a month.

The 2-year treasury yield over 10-year Treasury yield inverted to near 50-basis points. The deeper inversion in the yield curve pressured banking stocks, with Synchrony Financial (NYSE:SYF), State Street Corp (NYSE:STT), and U.S. Bancorp (NYSE:USB) down more than 2%.

Consumer discretionary stocks were one of the biggest drags on the broader market, weighed down by a 12% rout in Ford Motor Company (NYSE:F) and a more than 5% slump in General Motors (NYSE:GM).

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Ford warned on performance following a $1 billion hit in the third quarter from rising supplier costs.

“Ford preannounced 3Q results, calling for Ebit adjusted ranging from $1.4 billion to $1.7 billion, considerably below ingoing consensus of $2.98 billion and our estimate of $2.93 billion,” Deutsche Bank said in a note..

Tech, however, was one of the relative outperforming sectors on the day, down just 0.6%, as Apple added to gains from a day earlier.

Apple (NASDAQ:AAPL) rose more than 1% after TF International Securities analyst Ming-Chi Kuo said that the higher-margin iPhone 14 Pro models are attracting increasing demand that could help boost iPhone revenue and average selling price.

Latest comments

Market gonna gall like an ax from tonight through tomorrow
What if they shock us with 0.5% raise
😁😁
I hope everyone is ready to pay the piper. And anyone under the age of 45 probably doesn’t understand that 0% interest rate and unlimited the printing of money or QE is the result of all of this. And the gig is up. Everything is over finished done buried. They will be raising rates for years and years quantitive tightening for years and years of market lower by at least 30 to 40% from here. That is a normal market not what you just saw for the last 15+ years. To all millennials and generation Z. Welcome to reality. 7 to 9% 30 year mortgage and a 6-8% fed funds rate. That is normal not what we just had.
Priced in to my future decision to use fiscal ineptitude as a tax deduction. My tax office can go eat one.
Heh?  The Fed has been "hawkish" for quite some time now.  They just figured this out???
Brandon is giving away billions while Americans are broke.  American cities are overloaded with homeless people and American debt is through the roof, yet we get nothing while Brandon sends billions abroad and gives billions more to corporations
at least one person is spot on and living in reality. Excellently said.
Unless they follow economics 101 which you learn in your first year. You raise the fed funda rate above the CPI rate. But they don’t have the bravery for that.
You must have gone to Trump University.
Biden needs to give Ukraine 100 trillion.... America last🤬🤬🤬🤬
Headline "reasons". lol
This is a dumpster fire of an economy.
Huge crash is coming. Sell all stocks now or go broke!
Spot on correct. And narrowing it down even further technology you sell every piece of technology stock you own unless you have a 25 year timeframe. Why not take your profits and buy them 30 to 50% lower where they are going 100% no questions. That’s where they’re headed even the best companies. Apple between $100 and 110. Microsoft between 150 and 200. And/or the Vix above 50, no bottom.
Another miraculous last hour "recovery" in the BIGGEST INVESTMENT JOKE IN THE WORLD, as more losses are whisked out of the system.  Zero justification, it's just pure, criminal intervention.  Don't change your position America, the crime of the century will continue while the SEC turns a blind eye.
Sticking a knife in the backs of the middle. Criminally, fraudulent manipulated JOKE! Assume the proper postion America
haha nice
Inverted yield curve, big drop in new housing permits, retail in decline...these are some of the more flashy indicators of a decaying economy. But around where I live at there is one subtle clue that on the surface might be misconstrued for mindlessness rather than neglect. I have a Ring alarm system and the management app that I use for it integrates Ring's Neighbors app. The app lets you see posts from others that live within a defined proximity of your home regarding things like car/home break ins, safety issues, missing children, etc. One issue that has taken over the alerts on there have been people reporting "lost" pets, amazingly without collars or other identification. The rate of these posts have been getting more and more frequent over the last month or so. Some people might think it's negligence but with the ramping up of roaming animals being found, plus all the local shelters being completely full, it's obvious that it's due to people releasing them into the streets.
Sad truth. The best and most loyal creatures being dumped as a result of families seeking financial relief. Horrible third world reality.
Disgusting behavior but i guess they dont go without their beer, cigs and other mind altering requirements
There’s no hope when you’re an investor. He is 100% factually, correct and exactly what this person is saying is happening and it’s only gonna get worse and worse and worse. You think 2008 was bad just wait.
US economy, burdened by high inflation and recession, starts to resemble a slow motion wreck, and of course this affects stock market. Most folks in Biden’s administration would not qualify to run a lemonade stand, while the dear leader does not remember own name. What can go wrong?
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