Dow tumbles below 30,000 as lingering inflation scares off investors

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Wall Street’s main indexes closed well on Friday as investors torn between fears that the Federal Reserve’s hawkish rate policy could propel the US economy into recession continued to turn themselves.

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By the widely used definition, the Dow avoided ending more than 20% lower than its January 4 record all-time closing peak of 36,799.64 points, meaning the blue-chip index experienced a bear market. Label not received.

The S&P 500 and NASDAQ are already in a bear market.


The Dow Jones Industrial Average was down 486.27 points, or 1.6%, at 29,590.41, the S&P 500 was down 64.75 points, or 1.7%, and the Nasdaq Composite was down nearly 200 points, or 1.8%.

After enjoying huge gains for the past two years, Wall Street has been rocked by concerns about a range of issues, including the Ukraine conflict in 2022, the energy crisis in Europe, China’s COVID-19 flare-up and tightening financial conditions around the world.

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Half a dozen central banks, including the United States, Britain, Sweden, Switzerland and Norway, raised rates this week to fight inflation, but it was a sign of the Fed that it expects higher US rates to remain in place through 2023 that has pushed markets down. shut down. ,

Both the S&P 500 and Nasdaq are already in bear markets and are down more than 22% and 30% respectively so far this year.

The central bank raised rates on Wednesday by a widely expected 75 basis points and signaled a longer trajectory for policy rates, on hopes the Fed expects inflation to come under control in the near term.

“The most recent Fed actions leave us with the feeling that the end of rate hikes is not near,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, NJ.

“There is very little positive news right now and it could lead to a sort of eventual selloff… it is certainly possible that we could hit near-term lows.”

The tough outlook from a handful of companies – most recently FedEx and Ford Motor – has also exacerbated the crisis in a seasonally weak period for markets.

Goldman Sachs cut its 2022 target for the benchmark S&P 500 index by nearly 16% to 3,600 points, a 2.5% drop from current levels.

Technology and growth stocks fell more than 1%, with megacap names including Alphabet, Apple, Amazon, Microsoft and Tesla down.

Costco Wholesale shed 2.4% after the big-box retailer reported a decline in fourth-quarter profit margins.

The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose to 28.72 points.

Credit: /

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