Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dow, S&P post worst week in months after hawkish Fed spooks investors

EconomyJun 18, 2021 07:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A street sign is seen in front of the New York Stock Exchange on Wall Street in New York, February 10, 2009. REUTERS/Eric Thayer/File Photo

By David French

(Reuters) - U.S. stocks ended sharply lower on Friday, with the Dow and S&P 500 posting their worst weekly performances in months, after comments from Federal Reserve official James Bullard that the U.S. central bank might raise interest rates sooner than previously expected spooked investors.

The blue-chip Dow and the benchmark S&P 500 started the week at record closing levels, but ultimately fell by their most in any week since late October and late February, respectively.

The tech-heavy Nasdaq index also closed lower despite posting its two highest ever finishes in the last five days.

Investor confidence in their existing positions was initially dinged by the Fed's policy meeting, where it projected interest rate hikes would happen sooner than anticipated, and signaled it was reaching the point where it could begin talking about tapering its massive stimulus - as opposed to just thinking about it.

This was compounded by Bullard, president of the St. Louis Federal Reserve, saying Friday he was among the seven officials who saw rate increases beginning next year to contain inflation.

Inflation, and how the U.S. central bank will tackle it as the country comes out of the pandemic, had been front-and-center of investors' minds in the run-up to the policy meeting, which ended on Wednesday.

"I'm not surprised to see the market sell off a little bit. I'm never surprised, given the strong run we've had for such a long period of time, when you see some periods of profit-taking," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

The CBOE volatility index, Wall Street's fear gauge, closed Friday at a four-week high.

"Next week, you will have various Fed governors give speeches, and we'll have the same thing: some governors will be more hawkish, and some will be more dovish, so you'll see some back-and-forth," Ghriskey added.

On Friday, the Dow Jones Industrial Average fell 533.37 points, or 1.58%, to 33,290.08, the S&P 500 lost 55.41 points, or 1.31%, to 4,166.45 and the Nasdaq Composite dropped 130.97 points, or 0.92%, to 14,030.38.

The U.S. dollar strengthened after Bullard's comments, pushing the index which tracks the greenback against six major currencies to its highest level since mid-April.

While U.S. crude prices - which traditionally suffer from a strong dollar - initially fell on Friday, they rebounded after OPEC sources said the producer group expected limited U.S. oil output growth this year. [O/R]

The upward commodity move didn't translate into positive sentiment for U.S. energy stocks, with the sector's index the worst performer on the day. The utilities and financials indexes also fell by more than 2%.

Friday was also "quadruple witching day," the quarterly simultaneous expiration of U.S. options and futures contracts. It was the largest options expiration in history, noted Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW).

Volume on U.S. exchanges was 14.97 billion shares, compared with the 10.96 billion average over the last 20 trading days.

Dow, S&P post worst week in months after hawkish Fed spooks investors
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (32)
Todd Gray
Todd Gray Jun 19, 2021 10:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
like always, everybody forgets reality. the markets today are "absurdly" overvalued. and, they were ridiculously overvalued right before covid-19 hit. but, oh no! that's not the way it really is. its gonna keep going up for ever. pull your head out from between your buttocks.
Darryl Allen
Darryl Allen Jun 19, 2021 10:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sell your portfolio so I can buy
Bernard Tan
Bernard Tan Jun 19, 2021 3:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
End of 2022 is a very very long time in today’s volatile and instantly reactive market. No need to get panicky. That’s 18 long long months to go !!! 🤣
Todd Gray
Todd Gray Jun 19, 2021 3:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the markets were ridiculously overpriced pre-covid. they are absurdly overpriced today. and, there's no reason to think the fed won't move up the timeline - again. it always happens this way. they keep pumping it up even after the decline begins, and then call the date of the crash months after in actually began, just to save face. when you've lived long enough, you know how it works.
Vincent Li
Vincent Li Jun 18, 2021 9:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Total spooky fed.. Boo.. Then.. Boo a few times... Lol
Darren Hunt
Darren Hunt Jun 18, 2021 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks alot hawkish fed
Semih Unalan
Semih Unalan Jun 18, 2021 5:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How is it possible that a man as experienced as Bullard does not know what his words will lead to? They must check whether his friends or family made any money shorting the market.
Robert Cox
Robert Cox Jun 18, 2021 5:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Or he was asked a question and he gave an honest opinion.
Edward Chong
Edward Chong Jun 18, 2021 5:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bullard is not even a voting member.
Semih Unalan
Semih Unalan Jun 18, 2021 4:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bullard should be sacked and then sued.
Adrian White
Adrian White Jun 18, 2021 4:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why? Contrary to what Trump believed, it's not the Fed's job to keep the stock market going up at all costs. As long as Bullard was just being honest, you can't fault him for his comments.
Terence Williams
Terence Williams Jun 18, 2021 1:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Fed has been consistent for decades...always late to the game..we always pay for incompetence.
Emil Miclea
Emil Miclea Jun 18, 2021 1:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just another Bear trying to put his opiniated negative Short remarks on the market . Thats just his opininion yhat im sure hes shoritng the market
Andrew Allen
Andrew Allen Jun 18, 2021 1:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
And let me guess, you are long on the stock market correct? Why does your personal bias not disqualify your opinion, just as you say the shorts are biased?
Millennial Dip Buyer
Millennial Dip Buyer Jun 18, 2021 1:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The entire bull market we're in is a result of money printing on an unprecedented scale and it was going to come to an end eventually.  If you think these businesses are actually doing well and that a significant portion of the economy isnt dominated by zombie companies you're blissfully clueless about how bad things really are.
Alex Chan
Alex Chan Jun 18, 2021 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the US as a nation and an economy should look to create value (like corporations) instead of figuring a way to stop inflation. Creating value is really the only way to stop unwanted inflation, since inflation is kind of the only way to create value in a stagnant economy. So the US should really look to the European model and create a conglomerate union, i.e. merge it's economy with Canada or Mexico. This will positively change the economic landscap and create opportunity. And for the most part put the US economy on a more even playing field with China and the EU in terms of labor force and demographics.
Emil Miclea
Emil Miclea Jun 18, 2021 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I completely agree inflation will haven as you are coming out of a complete shut down and also as income is going up so will commodities and food . Its not like its a suprise . Everyone knows this that should not surprise investors at all . This market will be bullish going forwards as the free miney goes away jobs will increase and unemplyment will drop to under 5%
Andrew Allen
Andrew Allen Jun 18, 2021 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
you guys should be institutionalized. If you think America should be like Europe, you haven't been paying attention for the last 250 years. Either that, or you two are not Americans and are still ignorant of history and economics
John Brooks
John Brooks Jun 18, 2021 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
totally agree, people are so darn ignorant these days, they shouldn't be allowed opinions about a country they despise and complain constantly about, they can go get force vaccinated 100 times in Europe and see how long they live.
Andrew Allen
Andrew Allen Jun 18, 2021 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
even three year olds are allowed to have opinions, but it doesn't make them wise
Sol Wein
Sol Wein Jun 18, 2021 1:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Without Fed support there is no “recovery”. That is the phony nature of this whole thing. Fed cant take away support unless they are willing to ***this bubble. Buy your gold and silver before its too late!
Emil Miclea
Emil Miclea Jun 18, 2021 1:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Well obvioulsly we will have Fed support and Fed government Infastruture deal . Get i to growth stocks . Gold is done and over hyped
Vicky Jena
Vicky Jena Jun 18, 2021 12:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I really can't understand what the people of USA think. Interest rate will increase after a minimum of 18 months and people start panic selling from today.Horrible mindset.
Prithvi Setty
Prithvi Setty Jun 18, 2021 12:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
interest rate is just an excuse. if you haven't figured out yet.
Millennial Dip Buyer
Millennial Dip Buyer Jun 18, 2021 12:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This isn't panic selling, they're pricing it in because its going to happen.  You know, like how people price in a post-COVID economy where everything is peachy based on nothing or price in 20 years of growth and technological advances for growth stocks?  It's a 1% drop lmao
Mark Manley
Mark Manley Jun 18, 2021 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The US economy is strong, and containing inflation is a good thing. Do the people who are dumping their stocks get mad at their spouse when they streer the car away from danger? Only crazy people do that. And only crazy people get mad when the Fed takes action to keep the economy out of danger. And if you didn't see this coming, you need to stop listening to liberal news outlets.
Sol Wein
Sol Wein Jun 18, 2021 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So creating inflation then containing it. Because too little is bad and too much is bad, we need it just right and the Fed knows best lol
Millennial Dip Buyer
Millennial Dip Buyer Jun 18, 2021 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If the US economy was strong the fed wouldn't have had to consistently increase QE since 2008 to keep zombie companies alive.  It's entirely built on a house of cards.
Thawin Riewbumroong
Thawin Riewbumroong Jun 18, 2021 12:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Maybe he open short position before speak.
Thawin Riewbumroong
Thawin Riewbumroong Jun 18, 2021 12:21PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Maybe he open short position before speak.
avinish sarvaiya
avinish sarvaiya Jun 18, 2021 12:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why the ******do they come and speak irresponsibly!
avinish sarvaiya
avinish sarvaiya Jun 18, 2021 12:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why the ******do they come and speak irresponsibly!
Alan Rice
Alan Rice Jun 18, 2021 12:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why do people post crass omments !!
Yoyogi Shark
Yoyogi Shark Jun 18, 2021 11:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Remarkable how simple words from the FED that they may or may not let go a silent *****in 2 years tumbles the markets. How can anyone with at least one working braincell say that this is not a central planned economy?
Alan Rice
Alan Rice Jun 18, 2021 11:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
By moving one:s lips and tongue ??
Yoyogi Shark
Yoyogi Shark Jun 18, 2021 11:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Alan Rice  Haha :). Yes, such statement could be a result of mere muscle contractions rather than have its source in a reasonable thought process in the brain.
CT OREN
CT OREN Jun 18, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
500 pts down. Keep it low... yahoo!
Bipin Kochar
Bipin Kochar Jun 18, 2021 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Extremely strange of senior Federal Reserve official to make such an irresponsible statement.
arthur santos
arthur santos Jun 18, 2021 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
and at the worst possible time!
Steffen vdm
Steffen vdm Jun 18, 2021 11:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Maybe it's a very convenient time for them to make such a statement 🧐
Iyarin Boonnum
Iyarin Boonnum Jun 18, 2021 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The us stock party is over nowww
Shivam Dave
Shivam Dave Jun 18, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
He was among the seven from March meeting, so what's new?
cedrik marchand
cedrik marchand Jun 18, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
nothing lol
Antonio Velardo
Antonio Velardo Jun 18, 2021 11:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
🖕
Robert Palumbo
Robert Palumbo Jun 18, 2021 10:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it's all fake manipulation to keep the minions the minions and them in control. Funny how it got 10x worse starting Jan 20th
Stan Smith
Stan Smith Jun 18, 2021 10:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"with most of the data showing gains in excess of 3% towards the end of this year" more like 13% is the true figure...this is going to get ugly!. No sign of tapering either..not sure the FED can!
wishful drinking
wishful_drinking Jun 18, 2021 10:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Fed cannot raise the rates or slow the money printing because everything woud collapse. They just desperately trying to explain why they never hike the rates while they really should and try to postpone the inevitable collapse.
Naresh Chauhan
Naresh Chauhan Jun 18, 2021 10:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed is also bound to feed economy so nothing much to concern
Naresh Chauhan
Naresh Chauhan Jun 18, 2021 10:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed is also bound to feed economy so nothing much to concern
Naresh Chauhan
Naresh Chauhan Jun 18, 2021 10:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fed is also bound to feed economy so nothing much to concern
Jokers R Us
Jokers R Us Jun 18, 2021 10:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They're trying to have their cake and eat it too
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email