Stocks slide, erasing gains that followed Fed meeting, as volatility continues to reign.
"Stocks dove on Thursday, erasing gains from their best day since 2020 in a swing that highlights Wall Street’s heightened anxiety over what the Federal Reserve’s campaign to slow inflation means for the economy.
The S&P 500 fell 3.6 percent, after surging 3 percent on Wednesday.
The Nasdaq composite slid 5 percent, its biggest drop since June 2020.
The volatility was on display in other financial markets, too. Yields on government bonds spiked, with the rate on 10-year U.S. Treasury notes, a benchmark for borrowing costs across the economy, climbing above 3 percent and touching its highest level since 2018, reversing a drop on Wednesday.
The stomach-churning swings in the stock market have become bigger than usual in recent weeks, as investors panic that a combination of inflation and fast-rising interest rates could hit consumer spending, corporate profits and — ultimately — economic growth. In between those bouts of panic, glimmers of good news have triggered big rallies. . ."
Stock indexes slump as worries grow over higher interest rates
DAMIAN J. TROISE and ALEX VEIGA
"Stocks closed sharply lower on Wall Street on Thursday, erasing a rally from a day earlier, as markets assess the looming fallout from the Federal Reserve’s stepped-up fight against inflation.
The Standard & Poor’s 500 pulled back 3.6%, marking its biggest loss in almost two years.
The Dow Jones industrial average fell 1,063 points, or 3.1%.
Tech stocks fell the most, pulling the Nasdaq down 5%. . .
> The Fed is between a rock and a hard place, and because of instant information investors are experiencing both fear and greed at the exact same moment,” said Sam Stovall, chief investment strategist at CFRA. . .
> The Bank of England on Thursday raised its benchmark interest rate to the highest level in 13 years, its fourth rate hike since December as U.K. inflation runs at 30-year highs.
Energy markets remain volatile as the conflict in Ukraine continues and demand remains high amid tight supplies of oil. European governments are trying to replace energy supplies from Russia and are considering an embargo. OPEC and allied oil-producing countries decided Thursday to gradually increase the flows of crude they send to the world.
Higher oil and gas prices have been contributing to the uncertainties weighing on investors as they try to assess how inflation will ultimately affect businesses, consumer activity and overall economic growth.
The latest corporate earnings reports are also being closely watched by investors trying to get a better picture of inflation’s impact on the economy. Cereal maker Kellogg rose 3.5% after reporting encouraging financial results. Etsy stumbled 17.7% after giving a weak forecast.
Twitter rose 2% after Elon Musk said he had secured more backing for his bid to take over the company.
> Technology companies had some of the biggest losses and weighed down the broader market, in a reversal from the solid gains they made a day earlier. Internet retail giant Amazon slumped 8.1% and Google’s parent company fell 5.4%.
> Home builders fell broadly as average long-term home loan rates climbed. D.R. Horton slid 7.1%.
The average rate on a 30-year fixed-rate mortgage rose to 5.27% this week, its highest level since 2009, according to mortgage buyer Freddie Mac.
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