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Wall Street slips after Powell's hawkish remarks

Published 03/21/2022, 07:09 AM
Updated 03/21/2022, 07:08 PM
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 17, 2022.  REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) - Wall Street closed lower on Monday, with stocks extending their slide after U.S. Federal Reserve Chairman Jerome Powell hinted at a more aggressive tightening of monetary policy than previously anticipated, adding to uncertainties regarding the Russian invasion of Ukraine.

While all three major U.S. stock indexes ended well off session lows, they snapped four-session winning streaks on the heels of their biggest weekly percentage gains since early November 2020.

The central bank must move "expeditiously" to combat inflation, Powell told the National Association for Business Economics conference, adding that bigger-than-usual interest rate hikes could be deployed if needed.

"Much of the news today was telegraphed last week in (Powell's) comments," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "The difference is there was some question regarding whether a 50 basis-point rate hike might be a course of action sooner rather than later."

Fed funds futures now imply a 60.7% chance of a 50 basis-point hike in key interest rates at the Fed's next meeting in May, up from 52% before the text of Powell's speech was released.

"Some Fed governors have been vocal about front-end loading some of those hikes, putting them on the books sooner rather than later," Keator added. "But I don't think the markets should anticipate a series of 50 basis-point rate hikes between now and the end of the year."

Fighting raged on in Ukraine as efforts to negotiate an end to the conflict appeared to be making little progress.

Crude prices continued to surge as the European Union weighed joining the United States in banning Russian oil [O/R], which raised supply concerns and helped put energy shares out front.

The Dow Jones Industrial Average fell 201.94 points, or 0.58%, to 34,552.99, the S&P 500 lost 1.94 points, or 0.04%, to 4,461.18 and the Nasdaq Composite dropped 55.38 points, or 0.4%, to 13,838.46.

Six the 11 major sectors in the S&P 500 ended the session in the red, with communication services suffering the biggest percentage loss. Energy was the clear winner, gaining 3.8% on the day.

Shares of Boeing (NYSE:BA) Co slid 3.6% after one of its 737-800 aircraft operated by China Eastern Airlines (NYSE:CEA) crashed in southern China with no apparent survivors.

The rising geopolitical temperature helped defense stocks. Despite Boeing's decline, the S&P 500 Aerospace and Defense index rose 1.5%, with Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN), Northrop Grumman (NYSE:NOC) and General Dynamics (NYSE:GD) advancing between 2.5% and 4.6%.

A Moscow court labeled Meta Platforms Inc an "extremist organisation," upholding a decision to ban Facebook (NASDAQ:FB) in Russia. Meta's shares dropped 2.3%.

Alleghany (NYSE:Y) Corp surged 24.8% after Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc struck an $11.6 billion deal to buy the owner of reinsurer TransRe.

Shares of Nike Inc (NYSE:NKE) rose more than 4% in after-hours trading after the company beat quarterly revenue estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.70-to-1 ratio favored decliners.

© Reuters. View of the U.S. flag as a trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 21, 2022.  REUTERS/Brendan McDermid

The S&P 500 posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 52 new highs and 49 new lows.

Volume on U.S. exchanges was 12.82 billion shares, compared with the 14.65 billion average over the last 20 trading days.

Latest comments

Markets are drifting lower through the chops Dow could slide 500 points from here
Good effort mate!
The whole rate hikes situation is a conflict of interest, how to control inflation without crashing stock market. The "fake it until you make it" is not gonna work here.
"Wall Street slips after Powell's hawkish remarks"  -- were these remarks any more hawkish than what was said in last week's Fed meeting?  surely by this time everyone knows there is going to be multiple rate hikes, some in .25% and some in .5%?
how do rate hikes solve a supply chain issue. it's not that kind of inflation Powell.
Powell should be sued costimg people millions.
Every dinglebat analyst on this platform is 50% liquid 50% short and wanna keep everybody outside the market citing the end of days & closing shorts with the highest profit possible. G T F O here!
But first powell had to call his buddies buy puts.
Yes those are market makers
Kashkari undovishly said Friday, we need to "double the pace" of balance sheet runoff
the printer is out of ink !!!
"Oversold market" that's funny when the market is at record highs, and participation in the labor market is near the lows with 70s era inflation. Anyone with a history book knows where the market is heading. Interest rates should be have been at 3% already if the Fed really wanted 2% inflation.
  Prior to invasion of Ukraine, inflation in gas/oil was higher in the EU than in the US.  Russia was limiting shipments before it invaded.  Russia's had intended to invade long before it invaded.
How convenient
 let me guess, you took your Economics 101 class from Trump University?
Let’s face it, the world is at a tipping point on many different levels, but what we do know is that all the financial instruments cannot be at all-time highs or elevated at the same time. Stocks, commodities, real estate, crypto, etc are all elevated by the the collective Central Bank stimulus over the last 14 years (since 2008 crash) cheap money for that long has created numerous problem areas that now must be addressed. Of course inflation is finally running rampant, and of course the Central Banks are now backed into a corner to raise rates.. this “soft landing” will not be so soft. We all need to be prepared for the next surprise.. good luck everyone
Buy and hold Gold. The bid reset is for real.
If he just keeps his mouth shut.. market will do its job! He is spooking the calmness in market
Every Airline should avoid to buy Boeing!!​ Crash every month!!
We don't know the cause of the crash yet
it is ok. it is the stock market
"Crash every month!!"  -- which Q website did you get that information from?
There is not going to be a peace deal that leaves puketin in power. we want regime change
hey, this a business forum.... if you want to go tantrums, go to cnn, nbc, fox social media sites....
Powell just announced that inflation is very high and he'll take action. Where was he last week? What a cluster!! We're almost there!!
good one man lol
Hahaha in point
Best joke I heard all day
every poor and middle class is helpless when Biden come president of us
Anyone who blames Biden is a mor. on. this is global
"every poor and middle class" is stup.id  to donate to Trump's PACs which ends up in his personal accounts.
Every evonomist was telling , no more stimulus needed. Thet did it anyway . No more unemployment needed. They did it anyway …
Another miracle intraday "recovery" for the laughingstock of the financial world, with more losses vanishing into thin air as Wall Street twists the financial knife they plunged into the back of a America last week.  Biggest investment JOKE in the world.
Silver is projected to top $100 an ounce this year. Lose what?
  The idea of staying in a trade til its bitter end is a good way to lose $
Idiots are pushing us to the cliff's edge!! Saturday, Turkey reported 50% inflation, headed to 70%. Their lending rate is 20%. Currency is worthless!! We'll be there before year's end!!
Are you serious? Someone tell puketin his actions pushed bilateral ties to the brink of collapse not "comments." Someone needs to take this guys head off.
The world is at a tipping point on many different levels, but what we do know is that all the financial instruments cannot be at all-time highs or elevated at the same time. Stocks, commodities, real estate, crypto, etc are all elevated by the the collective Central Bank stimulus over the last 14 years (since 2008 crash) cheap money for that long has created numerous problem areas that now must be addressed. Of course inflation is finally running rampant, and of course the Central Banks are now backed into a corner to raise rates.. this “soft landing” will not be so soft. We all need to be prepared for the next surprise.. good luck everyone
Don't invest
The currency has been played bad by the Fed
SLV calls out to 12/30/22. Guaranteed Jackpot!!
Not a single article on raging inflation. Has it disappeared or doesn't it matter?
Google "inflation" and see how many articles you can find just from today
Here is the analysis from your financial guy. “Keep doing what your doing for the long term.” Actual analysis: we have no clue what to do, nothing makes sense anymore, but keep taking the risk!
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