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Skylan Brooks
Sep 15, 2022 8:27PM ET
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Stock Market Today: Dow Stumbles as Fears of Longer Hawkish Fed Policy Bite
© Reuters.
By Yasin Ebrahim
Investing.com -- The Dow stumbled Thursday, weighed down by falling energy and tech stocks with the latter pressured by rising Treasury yields as investors price in higher for longer Federal Reserve interest rate hikes to quell inflation.
The Dow Jones Industrial Average fell 0.6%, or 173 points, the Nasdaq was down 1.4% and the S&P 500 fell 1.1%.
Microsoft (NASDAQ:MSFT) fell more than 2% to lead the decline in big tech as the 10-year treasury yield continued to flirt with 15-year highs on bets of more hawkish Fed rate hikes after inflation data earlier this week surprised to the upside.
A 75-basis-point rate hike next week is almost priced in, according to Investing.com’s Fed Rate Monitor Tool. But the upside inflation seen earlier this week and the ongoing strength in the labor market have some betting on higher for longer rates.
The upside surprise in inflation, “coupled with the recent improvement in growth momentum and an uptick in labor demand, have led us to revise our outlook for the Fed once again," Jefferies said in a note, forecasting the Fed to hike until its benchmark rate reaches 4.6%.
Better-than-expected jobless claims and retail sales data on Thursday, showed that the labor market remained tight and consumer spending continues to be resilient.
Energy was also a big drag on the broader market as oil prices fell more than 3% as energy demand fears persisted following the International Energy Agency’s warning oil demand will likely wane in the final quarter of the year.
Devon Energy Corporation (NYSE:DVN), Valero Energy Corporation (NYSE:VLO), Phillips 66 (NYSE:PSX) were among the biggest decliners in the sector, with the latter down more than 4%.
Rail stocks, however, were mostly higher, sidestepping the broader market meltdown after the White House struck a tentative deal between the freight rail operators and their unions to avert a rail strike that could disrupt food and fuel supplies.
Norfolk Southern (NYSE:NSC) and Union Pacific Corporation (NYSE:UNP) were in the green, but CSX Corporation (NASDAQ:CSX) was down more than 3%.
In crypto-related news, ether fell more than 5% after its long-awaited network upgrade or merge, was completed.
Following the upgrade, Ethereum moved on from the proof of work consensus – the existing mining-driven method to validated transactions on the Ethereum network -- to a new proof of stake consensus.
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Comments (12)
Stephon Starrantino
Sep 15, 2022 6:24PM ET
The fed has to do one more hike and verbally state take a wait and see data approach !
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Stephon Starrantino
Sep 15, 2022 6:24PM ET
The fed has to do one more hike and verbally state take a wait and see data approach !
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JIM VETTER
Sep 15, 2022 6:20PM ET
".. longer Hawkish Fed policy.." Don't these bulls listen to Powell? The Fed has been Hawkish for several months and reinforcing that position. Are they just stupid?
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Keith Spiller
Sep 15, 2022 6:20PM ET
you are right on. the markets have been brainwashed for the last decade that they only go up. I guess old habits die hard
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Keith Spiller
Sep 15, 2022 6:20PM ET
old habits die hard
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Tom Michaels
Sep 15, 2022 6:17PM ET
waaaaaaaaaaa.........
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Buy And Sell
Sep 15, 2022 6:13PM ET
FED sell from balance sheet = higher interest rate = crash in stocks and real estates. Sell all stocks now or go totally broke!!!
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Casador Del Oso
Sep 15, 2022 6:13PM ET
Pretty extreme advice. Unfortunately you are probably 100% correct.
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Alan Rice
Sep 15, 2022 6:11PM ET
One ($1000 DJI) down and about 9 to go. Previous GOP corruption requires contrition AND correction. Tomorrow : Your call.
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JIM VETTER
Sep 15, 2022 6:11PM ET
Lol... good thing there's no corruption in the current geriatric, senile Dem camp, eh?
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Warm Camp
Sep 15, 2022 6:05PM ET
The market projects both further Fed rate hikes and the Fed failure to stop inflation. Monetary policy, aka the hikes, cannot stop inflation. Economics 101. Of course, both government and media care zilch about real economic issues. It is all consumed by politics, while ordinary folks pay the price.
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Warm Camp
Sep 15, 2022 6:05PM ET
It meant that monetarist policy alone cannot stop inflation. When government continues printing-spending non-stop, while product supply gets suffocated by regulations/taxes, the rate hikes do not affect inflation in any tangible way. The rate goes higher, while inflation goes higher too. Rat races.
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Ross Dre
Sep 15, 2022 5:33PM ET
That’s incredibly weird because yesterday, we learned from the same source, investors had “put inflation worries behind them.”
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Warm Camp
Sep 15, 2022 5:33PM ET
This “source” knows very little about market, investors and anything else.
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JIM VETTER
Sep 15, 2022 5:33PM ET
Exactly why you don't listen to these so-called financial reporters
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Mike Sim
Sep 15, 2022 4:57PM ET
Im sure somehow the criminals in suites will spin the FEDEX massive profit warning as “bullish” for the perfect 45 degree untethered friday “rally.” Criminally, Fraudulent manipulated JOKE!
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Keith Spiller
Sep 15, 2022 4:57PM ET
flash crash friday
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