U.S. stocks ended lower on Thursday after attempting to claw back Wednesday’s losses, as Treasury yields and the dollar climbed further after the Federal Reserve delivered a third jumbo interest-rate hike and signaled more to come.
- The Dow finished lower -107.10 or -0.35%
- The S&P 500 was down -31.94 or -0.84%
- The Nasdaq shed -153.39 or -1.37%
U.S. stocks declined for most of the session on Thursday following Wednesday’s selloff after the Federal Reserve produced another 75 basis-point rate hike and reiterated its commitment to crushing inflation, even if it means driving the U.S. economy into a recession.
Investors were rattled by the Fed’s so-called dot plot, which tracks forecasts of the benchmark interest rate from individual policymakers. It produced a median forecast for a peak fed-funds rate of 4.6% in 2023 — above market expectations. Fed forecasts also implied that unemployment may rise significantly and the economy slow sharply.
U.S. investors digested a couple of economic data reports early Thursday, including the latest read on jobless claims, which showed that new applications for unemployment benefits edged higher to 213,000 last week. However, the U.S. labor market remains robust. Data showed the current-account deficit for the second quarter shrunk compared with the same period last year, likely due to the impact of the stronger dollar.
Outside the U.S., the trend for tighter monetary policy among developed nations continued apace on Thursday — with one notable exception. Norway’s central bank raised borrowing costs by 50 basis points to 2.25% and the Swiss National Bank hiked by 75 basis points to 0.5%. The Bank of England also hiked rates by half a percentage point.………[read more]
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