The U.S. stock market’s main indexes fell on Thursday, extending declines for a third straight session, as investors worried that the U.S. Federal Reserve’s aggressive approach to rein in rampant inflation running at forty year highs could officially be labeled the recession in which the U.S. is already technically embroiled.
Ten of the 11 major S&P sectors declined in early trading, led by industrials and consumer discretionary stocks.
Weighing on the S&P 500 and the Nasdaq, shares of megacap technology and growth companies such as Apple Inc, Amazon.com Inc, Tesla Inc, and Nvidia Corp fell between 1.0% and 3.6% as benchmark U.S. Treasury yields hit an 11-year high.
The S&P 500 tech sector has slumped over 27% so far this year as compared to a 21% decline in the S&P 500 index.
“The higher interest rates imposed yesterday and the more hawkish tone delivered by the Fed will weigh on stocks in general and likely more on rate-sensitive sectors,” said Sam Stovall, chief investment strategist at CFRA Research.
The S&P 500 is now 3.3% away from its mid-June low, its weakest point of the year.
The U.S. central bank lifted rates by an expected 75 basis points on Wednesday and signaled that its policy rate would rise by 4.4% by year end and top out at 4.6% by the end of 2023, a steeper and longer trajectory than markets had priced in
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Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
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