Wall Street close: 1% declines in major indices on the eve of the Fed meeting
The main indices of the US stock market end Tuesday’s session in ‘red’, waiting for the Federal Reserve to hold its monetary policy meeting on Wednesday. The market expects another rate hike of between 0.75% and 1%.
On the day, the dow jones falls 1.01% to 30,706.23 points and the S&P 500 it fell 1.13% and stood at 3,855.93 units. On the other hand, the Nasdaq Composite falls 0.95% to 11,425 integers, while the Nasdaq 100 it lost 0.85% and fell to 11,851.54 points.
So far this year, the Dow Jones is down 15.50%; the S&P 500 loses 19.10% and the Nasdaq 100, 27.38%.
“Fed officials are about to put numbers on the pain they have been warning when they release the new projections for the economy on Wednesday. They could show a substantial increase in rates and unemployment ahead as the estimated price to reduce inflation. Officials are also expected to raise rates by 75 basis points, with some market watchers saying a 100 basis point hike could also be on the table.
For Charlie McElligott, cross-asset strategist at Nomura Securities International,” the market is underestimating the possibility that the Fed could opt for a move greater than 100 basis points. In addition to last week’s inflation surprise, he cited the fact that both the labor market and wages have remained ‘hot’ since Fed Chairman Jerome Powell’s Jackson Hole speech in late August.” .
“The idea that the Fed will raise rates and immediately cut them again in mid-2023 should be put back on the beach chairs,” said Gargi Chaudhuri, head of iShares investment strategy for the Americas at BlackRock. “The latest data has confirmed the need for the Fed’s tough stance. We believe we are entering a new regime of higher volatility and slower growth“, added the expert.
Facebook Comments
Disqus