On Thursday, tech companies led a broad equities decline as Wall Street worried about the Federal Reserve's aggressive stance, which coincided with its decision to maintain interest rates constant. The S&P 500 (GSPC) fell 1.6% after falling almost 1% on Wednesday, while the Dow Jones Industrial Average (DJI) fell 1%. The Nasdaq Composite (IXIC), which is …
On Thursday, tech companies led a broad equities decline as Wall Street worried about the Federal Reserve’s aggressive stance, which coincided with its decision to maintain interest rates constant.
The S&P 500 (GSPC) fell 1.6% after falling almost 1% on Wednesday, while the Dow Jones Industrial Average (DJI) fell 1%. The Nasdaq Composite (IXIC), which is heavily weighted in technology, lost around 1.8%, continuing to lead the falls.
After reviewing the central bank’s projection, investors believe officials expect interest rates to remain “higher for longer.” The question is how long the period will be, considering that the Fed signaled another raise during one of its final two sessions this year. Goldman Sachs has revised its expectation for a Fed rate decrease to the fourth quarter of 2024.
Some investors are concerned about the likelihood of sustained high interest rates, which would put pressure on equities and bonds. The benchmark 10-year Treasury yield increased on Thursday, reaching its highest level in nearly 15 years at one point.
In his news conference, Fed Chair Jerome Powell, however, emphasized that policy will be determined by economic data. According to official numbers released Thursday, unemployment claims last week fell to their lowest level since January, signaling the latest evidence of resilience in the US labour market.
On Thursday, the Bank of England opted to leave interest rates constant after raising 14 times in a row due to an unexpected slowdown in inflation. Elsewhere in Europe, the Swiss National Bank maintained interest rates on hold, while Norway’s central bank hinted that it would follow September’s boost with another in December.
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