Wall Street tumbles on rate, recession worries, defoliated chipmaker prospects
What it covers is…
Primarily the NASDAQ index in the Wall Street market tumbled nearly 3% on Thursday after a new set of data showing a strong economy fueled distress that the Federal Reserve would stick to its hostile reinforcement path. In addition, Micron’s (Micron Technology Inc.) glum forecast adds to a bleak mood.
Simultaneously, Amazon.com, Apple Inc, and Microsoft Corp fell more than 3% each, as two-year Treasury yields retrieved steam on extended rate spike expectations.
Tesla Inc ramped up 6.5% after the E.V. (electric vehicle) maker magnified its discount offering on models in the U.S. this month, among a few concerns over moderating demand.
Losses in rate-sensitive growth stocks saw technology and consumer discretionary sectors usher in losses among the 11 major S&P 500 sub-indexes.
The final evaluation of the third quarter U.S. gross domestic product disclosed that the economy grew at a 3.2% year-end rate, over the previous evaluation rate of 2.9%.
However, in the meantime, a Labor Department record showed the number of Americans filing for state unemployment welfare rose to 216,000 in the last week, which is much below economists’ estimate of 222,000, signaling a still-tight labor market.
Sam Stovall’s hypothesis
Sam Stovall, the Chief Investment strategist at CFRA Research in New York, said, “The GDP data beat a lot of expectations. There are concerns that the economy is not giving up too easily, and it’s putting up a fight that will likely require the Fed to remain hawkish and keep interest rates higher for longer.”
The Philadelphia S.E. Semiconductor index also posed its pathetic single-day performance in two months, as shares of Micron Technology Inc, Qualcomm Inc, Nvidia Corp, and Advanced Micro Devices Inc declined between 4.4% and 7.4%.
Agitation of a recession following the U.S. central bank’s perpetuated interest rate increases have weighed highly on equities this year, with the benchmark S&P 500 set for yearly declines of 20%, embedding its worst performance since the 2008 financial crisis.
There were ongoing bets for a 25 basis point hike of 4.5% – $.75% in February by the Fed remained constant at 71.4% following the data on Thursday; however, the expectations for the final value slacked up 4.89% by May 2023.
The ongoing market rates
On Thursday at 11:44 am, E.T., the DJIA ( Dow Jones Industrial Average) was down 500.33 points (1.50%) from 32,876.15. At the same time, the S&P 500 was down 76.56 points (1.97%) at 3,801.88, and the Nasdaq Composite was down 303.39 points (2.83%) at 10,405.98.
Car Max Inc slid 7.5% to the bottom of the S&P 500 after the preowned-vehicle retailer paused share recouping following an 86% drive in quarterly profit.
AMC Entertainment Holdings Inc collapsed 13.6% after the world’s largest cineplex chain said it would raise $110 million through a favored stock sale. In contrast, the declining issues outnumbered advancers for a 5.42:1 ratio on the NYSE and a 2.86:1 ratio on the NASDAQ.
The Final Verdict
In the end, The S&P index registered one new 52-week high and 15 new lows; on the other hand, the NASDAQ registered 57 new highs and 303 new lows.
For markets to get secure, “investors will need to see convincing evidence that inflation is coming under control, allowing central banks to become less hawkish,” stated Mark Haefele, Chief Investment Officer at UBS Global Wealth Management. “This turn, in our view, is still some time away,” he added.
- Published By Team Nation Press News