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

Stock Markets Sep 20, 2022 04:08PM ET
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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).

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.

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

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Comments (12)
Scot House
Scot House Sep 20, 2022 9:08PM ET
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Market gonna gall like an ax from tonight through tomorrow
Mad Money
Mad Money Sep 20, 2022 8:29PM ET
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What if they shock us with 0.5% raise
Artur Na
Artur Na Sep 20, 2022 8:29PM ET
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Adamo Nals
Adamo Nals Sep 20, 2022 7:58PM ET
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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.
James Wills
James Wills Sep 20, 2022 7:58PM ET
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Priced in to my future decision to use fiscal ineptitude as a tax deduction. My tax office can go eat one.
Sun Moon
Sun Moon Sep 20, 2022 7:54PM ET
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Heh?  The Fed has been "hawkish" for quite some time now.  They just figured this out???
Nick Johnson
Nick Johnson Sep 20, 2022 7:34PM ET
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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
Casador Del Oso
Casador Del Oso Sep 20, 2022 7:34PM ET
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Raising rates will do little to curb inflation as long as there is excessive fiscal spending.
Adamo Nals
Adamo Nals Sep 20, 2022 7:34PM ET
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Casador Del Oso at least one person is spot on and living in reality. Excellently said.
Adamo Nals
Adamo Nals Sep 20, 2022 7:34PM ET
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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.
Brad Albright
Brad Albright Sep 20, 2022 7:34PM ET
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You must have gone to Trump University.
Nelson Manning
Nelson Manning Sep 20, 2022 7:10PM ET
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Biden needs to give Ukraine 100 trillion.... America last🤬🤬🤬🤬
Erikke Evans
Erikke Sep 20, 2022 6:35PM ET
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Headline "reasons". lol
Cody Hawkins
Cody Hawkins Sep 20, 2022 5:59PM ET
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This is a dumpster fire of an economy.
Buy And Sell
Buy And Sell Sep 20, 2022 5:52PM ET
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Huge crash is coming. Sell all stocks now or go broke!
Adamo Nals
Adamo Nals Sep 20, 2022 5:52PM ET
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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.
Mitchel Pioneer
Mitchel Pioneer Sep 20, 2022 5:27PM ET
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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.
Mike Sim
Mike Sim Sep 20, 2022 5:27PM ET
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Sticking a knife in the backs of the middle. Criminally, fraudulent manipulated JOKE! Assume the proper postion America
Bill Powers
Bill Powers Sep 20, 2022 5:27PM ET
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Mike Sim haha nice
 
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