Categories: Top Stories

US Stock market news live updates: Stocks tumble after Powell’s slower but higher cues

U.S. stocks sank lower early Thursday as Wall Street reeled from assertions by Federal Reserve Chair Jerome Powell that hopes for a policy pivot were “premature” after the central bank delivered a fourth consecutive interest rate hike of 75 basis points.

The S&P 500 (^GSPC) fell 1.2% at open after the index plunged 2.5% in the previous session, its worst loss on a Fed day since January 2021, per Bloomberg data. The Dow Jones Industrial Average (^DJI) shed 280 points, or 0.9%, and the technology-focused Nasdaq Composite (^IXIC) was off by 1%.

Advertisement

Meanwhile, Treasury yields ascended, with the key 10-year note inching towards 4.2%, and the rate-sensitive 2-year yield above 4.7%. The U.S. dollar index also moved higher.

The S&P 500’s 2.5% loss Wednesday marked its 54th decline of 1% or more in 2022 — the worst downside volatility since 2009, according to Compound Advisors’ Charlie Bilello.

Advertisement

U.S. investors also had their attention on action across the Atlantic, with the Bank of England following suit on the Fed’s move, also raising interest rates by three quarters of a percentage point.

Wednesday’s increase brings the Fed’s benchmark policy rate, the federal funds rate, to a new range of 3.75% to 4%, its highest level since 2008. Although the move came in line with expectations, stocks sank after Powell indicated officials may lift interest rates above the 4.6% previously estimated – signaling further tightening is certain, even after the policy statement implied hikes may be smaller in size.

Advertisement

“The market initially viewed the November Federal Open Market Committee (FOMC) statement as dovish, but a hawkish press conference caused almost a full reversal of these moves due to comments that the ‘ultimate level of interest rates will be higher than previously expected’ and it is ‘premature to think about pausing rate hikes,’” economists at Bank of America led by Michael Gapen said.

The FOMC’s statement also acknowledged the lagged effects of cumulative monetary tightening, suggesting heightened attention by the rate-setting group to concerns over economic growth.

Advertisement

Investors shift their attention now to the all-important jobs report at 8:30 a.m. ET on Friday. Figures from the labor department are projected to show a payroll gain of 190,000 for October, according to Bloomberg estimates. The print, if realized, would mark a drop-off of numbers seen across the pandemic recovery but reflect still-robust hiring, with pre-COVID payrolls averaging 150,000-200,000 per month.

Powell also said in his speech that “the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers.”

In corporate news, Elon Musk is reportedly planning to slash roughly half of Twitter’s workforce (3,700 of approximately 7,500 employees), according to a report from Bloomberg News – just one week after closing a dragged-out bid to purchase the social media platform in a $44 billion deal.

Advertisement
Elon Musk’s photo is seen through a Twitter logo in this illustration taken October 28, 2022. REUTERS/Dado Ruvic/Illustration

On the earnings side, shares of Qualcomm (QCOM) sank roughly 8% Thursday morning after the smartphone chipmaker issued a forecast that fell below estimates, citing macroeconomic headwinds and COVID lockdowns in China.

Shares of Roku (ROKU) plunged 15% after the company warned of economic pressures and weakness in advertising sales, while also forecasting wider-than-expected loss for the current quarter.

Etsy (ETSY) shares rallied 8% in extended trading after the online marketplace reported third-quarter revenue that beat analysts’ expectations.

Advertisement
Sola Adeyemo

Recent Posts

NIGERIAN BREWERIES PARTNERS OZA CARNIVAL

PRESS STATEMENT Nigerian Breweries PLC - The pioneer and largest brewing company in Nigeria which is…

7 hours ago

CAF Made Me Believe I Won – Achraf Hakimi

Paris Saint-Germain star Achraf Hakimi has spoken out following his defeat by Ademola Lookman for…

19 hours ago

Oleksandr Usyk defeats Tyson Fury to tetain heavyweight title

Ukrainian boxer Oleksandr Usyk reinforced his position as one of the greatest heavyweight champions in…

19 hours ago

Nigerian Emergency Agency NEMA Puts All Offices On Alert Over Fatal Stampedes

The National Emergency Management Agency (NEMA) has said it has put all its zonal, territorial…

19 hours ago

We Will Bury PDP, Ibori’s Daughter Blows Hot

Erhiatake Ibori-Suenu, member representing Ethiope Federal Constituency of Delta State in the House of Representatives…

19 hours ago

Emefiele: EFCC secures final forfeiture of 1.925 hectares of landed property linked to former CBN Governor

The Economic and Financial Crimes Commission (EFCC) has reportedly secured a final forfeiture order for…

20 hours ago