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Wall Streets ends down, oil gains as Powell suggests aggressive Fed policy

Economy Apr 21, 2022 05:06PM ET
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By Pete Schroeder

WASHINGTON (Reuters) - Wall Street reversed course and posted losses on Thursday while oil gained as Federal Reserve Chairman Jerome Powell suggested the U.S. central bank would move aggressively to curb inflation.

Powell said that a half-point interest rate increase will be "on the table" when the Fed meets in May, adding it would be appropriate to "be moving a little more quickly."

U.S. stocks opened strong, buoyed by corporate earnings and strong jobless data, but began to retreat ahead of Powell's afternoon remarks. Those losses steepened after he spoke, as investor concerns about central banks' inflation fight took center stage.

"Powell is intimating that avoiding a recession will not be easy. That is new," said Tim Ghriskey, senior portfolio strategist for Ingalls & Snyder in New York. "It's a relief for the market to hear the Fed admit this, therefore they may be more focused on avoiding this possibility or avoiding any type of deep recession, which is what the market really fears."

The Dow Jones Industrial Average ended down 1.05%, while the S&P 500 lost 1.48% and the Nasdaq Composite dropped 2.07%.

The MSCI world equity index, which tracks shares in 45 nations, was down 1.12%.

Oil prices gained ground as concerns about supply due to a potential European Union ban on Russian oil came to the fore. Russian forces stepped up their attacks in eastern Ukraine on Thursday.

Brent crude settled up 1.4% at $108.33 a barrel, and U.S. crude ended 1.6% higher at $103.79 a barrel. [O/R]

The benchmark 10-year Treasury yields was 2.896% after Wednesday's high of 2.981%, which had been the highest since December 2018. Two-year yields, which are highly sensitive to interest rates, reached 2.730% on Thursday, also the highest since December 2018, before dipping back to 2.686%.

Markets had been boosted earlier in the day, as upbeat Tesla (NASDAQ:TSLA) earnings and airline forecasts of profitability this quarter joined with data showing unemployment rolls at their lowest level in 52 years. [.N]

Powell said during a discussion of the global economy at the meetings of the International Monetary Fund that the labor market was "not sustainably hot."

His remarks effectively confirm market expectations of at least another half-percentage-point rate hike from the Fed next month while one ECB policymaker said on Wednesday it might start hiking euro zone rates as early as July.

In the currency markets, the dollar index, which tracks the safe-haven currency against a basket of six currencies, was up 0.2% to 100.589.

Looming rate hikes weighed on gold, which hit its lowest levels in two weeks in afternoon trading. Spot gold was last down 0.33% to $1,951.03 per ounce.

Wall Streets ends down, oil gains as Powell suggests aggressive Fed policy
 

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Comments (7)
Marco cuevas
Marco cuevas Apr 21, 2022 12:25PM ET
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Lol hedge funds can't even wait till Friday because hedge funds have been hemmoraghaging money since Feb...lol racket is in full on mode.
Marco cuevas
Marco cuevas Apr 21, 2022 11:43AM ET
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Nasdaq went from 1.13% to .19% in 2 hoURJs WWWeeeeeee hedge funds taking our MONey...manipulation because there are 6000.call.options.for trsla .tomorrow.A AT 1050
Marco cuevas
Marco cuevas Apr 21, 2022 10:45AM ET
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Wooo look.at the nasdaq drop.you can almost here the flush noise as the t oilet takes all your money.
me ish
me ish Apr 21, 2022 10:45AM ET
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not taking my money - I'm shorting! and it's going down far further - main point - inflation is crazy high and will continue so the FED will have to act aggressively. Secondly the Euro / US and Chinese consumer are going to be far poorer moving forward compared to the last two quarters as stimmies / savings are run dry - credit card debt is now spiralling outa control just as rates are going to start being raised - perfect storm folks for a screeching halt to the economy!
Cory Larson
Cory Larson Apr 21, 2022 10:45AM ET
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yep. but the flush isn't ready. still filling the bowl with ******* it's close, but not quite there.
Meself Meself
Meself Meself Apr 21, 2022 9:24AM ET
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if the French are dense enough to vote macrony they deserve the cancelation of their culture
Richard Lomax
Richard Lomax Apr 21, 2022 6:05AM ET
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Excellent article, the future undoubtedly holds a Correction, with a capital C, for Stocks....but with Netflix and Hollywood studios on their knees, the Exchanges provide action and dreams...We must march forward...but not to war !
James Pattison
James Pattison Apr 21, 2022 12:13AM ET
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Yields are ripping…
Stan Smith
Stan Smith Apr 20, 2022 11:41PM ET
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What have yield drops got to do with anything? Stocks 'shrugged' off rising yields two days ago and went up, and now stocks are up on falling yields. LOL...
Daniel Bonnichsen
Daniel Bonnichsen Apr 20, 2022 11:41PM ET
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How to wrote investing articles: <observe development>, <insert generic reason with correlation to the development>… done
Chris Johnson
Chris Johnson Apr 20, 2022 11:41PM ET
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Exactly... It's hilarious to read these articles
Daniel Bonnichsen
Daniel Bonnichsen Apr 20, 2022 11:41PM ET
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