Plummeting figures at the New York Stock Exchange come weeks after the Federal Reserve implemented a 25-point hike in interest rates. Despite already surging investor concerns, Tuesday’s closing numbers were only further burdened by continued grim market outlooks on the duration of increased rates.
\nUS stocks took a sharp nosedive on Tuesday, rattling Wall Street investors amid growing concerns about the strength of the American consumer.
\nThe Dow Industrial Average (DJIA), which is used to measure the overall performance of the stock market, closed Tuesday’s trading session 697.10 points in red territory. The S&P 500 fell by 2.0% to 81.75 points, with the Nasdaq Composite plummeting by 2.50% to 294.97 points.
\nThe indices’ closing figures marked their worst downturn since December 15. The worst-performing Dow member on Tuesday was big box store Home Depot, which lost 6% after they posted weaker-than-expected revenue for their fourth quarter.
\nThe latest grim forecasts on Wall Street suggest the Federal Reserve isn\u2019t done hiking interest rates, in what they view as an effort to cool inflation. However, Chris Hussey, a managing director with Goldman Sachs, explains the economy isn\u2019t necessarily doomed even as interest rates may grow.
\n\u201cBack in the fall, the concern was that too-high rates are going to induce a US recession. But today, the concern has been flipped on its head: too strong growth is going to keep rates high,\u201d Hussey explained in a Tuesday note.
\n\u201cRates may be on a round trip to 4%, but they are traveling on a very different road than the one they were on the last time we saw 4% 10-year yields,\u201d the analyst continued. \u201cMost companies would much rather operate in an environment of sustained higher rates and sustained high growth than one of high rates and declining activity.\u201d
\nGoldman Sachs also revealed an optimistic outlook for what the economy can expect from rate hikes in the future, noting that the worst of the interest rate increases are \u201clargely behind us.\u201d
\n\u201cThat leaves us with only the impact from the latest hikes and the 75bp of additional hikes we expect this year \u2014 suggesting that the economy may remain on firm ground even as the Fed tweaks rates higher this year,\u201d added Hussey.
\nThe latest comes as the Federal Reserve will be releasing the minutes from their January 31 through February 1 meeting on Wednesday at 2 p.m. local time, which may shift the direction of the market. Last week, St. Louis Federal President James Bullard revealed that a 50 basis point rate hike can\u2019t be \u201cruled out,\u201d and said that he had advocated for such a hike.<\/p>\n
Sputniknews<\/p>\n
Tags\uff1aFederal Reserve, Securities Exchange<\/p>\n","protected":false},"excerpt":{"rendered":"
Plummeting figures at the New York Stock Exchange come weeks after the Federal Reserve implemented a 25-point hike in interest rates. Despite already surging investor concerns, Tuesday’s closing numbers were only further burdened by continued grim market outlooks on the duration of increased rates. US stocks took a sharp nosedive on Tuesday, rattling Wall Street […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1155],"tags":[2558,1693],"class_list":["post-6259","post","type-post","status-publish","format-standard","hentry","category-business","tag-dow","tag-rates"],"_links":{"self":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/6259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6259"}],"version-history":[{"count":1,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/6259\/revisions"}],"predecessor-version":[{"id":6260,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/6259\/revisions\/6260"}],"wp:attachment":[{"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}