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U.S. Stocks Fall After Fed Sets Expectations for Rate Path

Published 09/22/2022, 09:50 AM
Updated 09/22/2022, 10:55 AM
© Reuters.

By Liz Moyer

Investing.com -- U.S. stocks fell a day after the Federal Reserve delivered its predictions for the path of interest rates.

At 10:53 ET (14:53 GMT), the Dow Jones Industrial Average was down 85 points, or 0.3%, while the S&P 500 was down 0.8% and the NASDAQ Composite was down 1.3%.

As expected, the Fed raised its benchmark rate by a 0.75 percentage point. It also offered forecasts for rates, saying they would rise above 4.5% next year, which is higher than expected and a period that was longer than expected.

Investors have worried that an aggressive Fed could tip the economy into a recession. The Fed is determined to tame inflation, and acknowledged that it would mean unemployment will rise in the process. 

The labor market remains tight, with 213,000 new jobless claims filed last week, which was below expectations and only slightly above the revised figure for the week before. 

The Fed predicted yesterday that unemployment would rise to 4.4% next year from 3.7% now, though Chair Jerome Powell pointed out during a press conference yesterday that there are still a high number of job openings versus job seekers. 

Robinhood Markets Inc (NASDAQ:HOOD) shares rose 1.5% on a report the Securities and Exchange Commission will allow brokers to keep their payment for order flow business model, after criticism of the practice. The report by Bloomberg said there could be rule changes ahead.

Shares of Salesforce Inc (NYSE:CRM) rose 2.5% after the software maker said fiscal year revenue was targeted to be $50 billion.

Oil jumped. Crude Oil WTI Futures was up 0.7%, to $83.47 a barrel, while Brent Oil Futures crude rose 0.7%, to $90.47 a barrel. Gold Futures rose 0.2% to $1679 an ounce.

Latest comments

FED is nice a slowly ****all growth in US and the rest of the world with their extreme rate hikes. Dollar is climbing and oil is priced in Dollars creating inflation in other nations added to the energy crisis, which means fewer money to buy american products. We are on a clear path to the poor 1980´ies. Good work in ****the economy. Must be great to be a bear investor.
all market trash please help biden bullish
the markets and especially tech are overvalued by about 30%. This is as good thing. Equilibrium is needed. Rates need to hit 5ish.
Right! For more than a decade, people have been complaining that the US stock markets were artificially supported by excessive Federal Reserve liquidity. Well, here we are: that liquidity is now being withdrawn and markets are returning to fair value. Not a bad thing.
Fed actually want a big recession to start over fresh. Unluckily, US economy is too strong so that they have to push very hard in order to collapse the mrk. It's about time. Cheers!
Not "big recession.  Little.  Powell said, "We're at the very lowest level of what is restrictive"
Fed's monetary policy is simply reacting to Democrat's fiscal policies of social spending and oil and gas energy supply.
US productions of crude & nat gas (now at all-time-high) have been trending up under Biden.
"Even though it only accounts for roughly 7% and 8% of domestic production, respectively, oil and gas production on public lands is at or near an all time high. Similarly, the Biden administration is continuing to approve drilling permits. During 2021, the Bureau of Land Management approved nearly 4,000 drilling permits — a rate higher than during the first three years of the Trump administration. Now, the oil industry is sitting on a remarkable 9,173 approved, but unused, federal lands drilling permits."
westernpriorities.org, 2022/03
A dire warning, stocks will crash over time, maybe recover in summer 2025. Sell all stocks now or go broke...
I think the Fed is very happy today, but certainly more needs to be done. The USD needs to go to 125 and many more people need to lose their jobs.
"The labor market remains tight, with 213,000 new jobless claims filed last week, which was below expectations"
Now do labor force participation stats since Dems are paying lazy people to stay home.
  Trended up since Biden's inauguration from 61.4% to 62.4% in Aug.
The downward trend will continue in 2023!
It's better the Fed's slow inflation down with interest rate hikes then have them peak on their own and total collapse needing massive stimulus devaluing your wealth to try to beat deflation. I think the Fed's doing exactly as needed atm. They couldn't of been more clear as to what they want business and corporations should adjust accordingly to maintain profit margins.
The Fed predicted yesterday that unemployment would rise to 4.4% next year from 3.7% now, though Chair Jerome Powell pointed out during a press conference yesterday that there are still a high number of job openings versus job seekers.
Isn't that what the article just said?
Lol ..... the market will give retail investors the exact opposite of what they are thinking.
Impossible.  Different investors have different opinions.
Let's face it folks. If you're a longer-term investor you should have cashed out months ago. It's not uncommon for the SP500 to fall 50% from ATH during a bear market. Imagine where this index will be at by March 2023. Much lower than today I'll bet.
Lol how many bear markets have you been in where the SP500 has fallen 50% from ATH? ZERO lol. While I agree traders should have cashed out LTI should be buying more on the way down. LTI dont try to time the market....that's the entire purpose of LTI.
yes bear market has started but after 15 Jan 2023 bulls will start mark this... so guys start shorting...
yes bear market has started but after 15 Jan 2023 bulls will start mark this... so guys start shorting...
The Fed will give it a 10 with a smile on its face.
No one can give you as much as the White House promises you. I think that these steps were thought out before the presidential elections.
S&P 500, ytd, -21%. Golly
buy when there is a doubt....
Go right ahead. Good luck!
buu when there is a doubt...
Fed is basically now one-eyed, malfunctioning. Tresury Sec. is incredibly silent. In the old days, Bob Rubin would come out and say Economy is sound, there is no reason to fear, etc.
the market will still end in green today
Only buy on dips market will boom to 35000
Flagrant, criminal intervention in living color.  Another day of criminal comedy in the biggest investment joke in the world.
As US stock market keeps falling, who is happy? Ukraine or Russia?
Seeing US smarket keeps falling, probably Powell is happy, shouting yes!
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