Stocks slid on Thursday after major averages emerged from a day of steep losses following another big rate hike by the Federal Reserve.
Stocks were mostly down early in the morning, with the Dow Jones Industrial Average down 91 points, or 0.3%. The S&P 500 traded down 0.74% and the Nasdaq Composite slipped 1.4%.
Industrials and Consumer Discretionary were the worst performing sectors in the S&P 500, losing more than 1% each. Growth-oriented technology and semiconductor stocks also fell on fears of a slowing economy.
“Markets feel they need to recalibrate valuations and when that happens it happens in a linear fashion – shoot first, ask questions later,” said Art Hogan, chief market strategist at B. Riley. wealth.
Most analysts incorrectly predicted where the federal funds rate would end the year ahead of Wednesday’s central bank meeting — a misstep that likely weighs on stocks, he said.
Stocks fell on Wednesday, continuing the recent selling trend as investors assessed the Fed’s latest comments, with the Dow Jones and S&P slumping to levels not seen since June 17 and June 30, respectively. The Nasdaq hits its lowest level since July 1.
The sharp decline in equities came during a volatile trading session after the Fed’s third consecutive rate hike of 0.75 percentage points.
Policymakers on Wednesday pledged to keep raising rates to 4.6% in 2023 before retreating in the fight against inflation, raising fears on Wall Street that the economy could tip into a recession as the central bank aims to slow economic growth.
Some investors are increasingly concerned about the Fed’s aggressive hike program and what it means for the economy going forward.
“The Fed has paved the way for much of the world to continue with aggressive rate hikes, and that will lead to a global recession, and its severity will be determined by how long it takes inflation to come down” , said Ed Moya. , senior market analyst at Oanda.
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