The Dow Jones Industrial Average ended down 1.05%, while the S&P 500 lost 1.48% and the Nasdaq Composite dropped 2.07%
Wall Street reversed course and posted losses on Thursday while oil gained as Federal Reserve Chairman Jerome Powell suggested the U.S. central bank would move aggressively to curb inflation.
Powell said that a half-point interest rate increase will be ‘on the table’ when the Fed meets in May, adding it would be appropriate to ‘be moving a little more quickly.’
U.S. stocks opened strong, buoyed by corporate earnings and strong jobless data, but began to retreat ahead of Powell’s afternoon remarks. Those losses steepened after he spoke, as investor concerns about central banks’ inflation fight took centre stage.
Powell is intimating that avoiding a recession will not be easy. That is new, said Tim Ghriskey, senior portfolio strategist for Ingalls & Snyder in New York. It’s a relief for the market to hear the Fed admit this, therefore they may be more focused on avoiding this possibility or avoiding any type of deep recession, which is what the market really fears.
The Dow Jones Industrial Average ended down 1.05%, while the S&P 500 lost 1.48% and the Nasdaq Composite dropped 2.07%.
The MSCI world equity index, which tracks shares in 45 nations, was down 1.12%.
Oil prices gained ground as concerns about supply due to a potential European Union ban on Russian oil came to the fore. Russian forces stepped up their attacks in eastern Ukraine on Thursday.
Brent crude settled up 1.4% at $108.33 a barrel, and U.S. crude ended 1.6% higher at $103.79 a barrel.
The benchmark 10-year Treasury yields was 2.896% after Wednesday’s high of 2.981%, which had been the highest since December 2018. Two-year yields, which are highly sensitive to interest rates, reached 2.730% on Thursday, also the highest since December 2018, before dipping back to 2.686%.
Markets had been boosted earlier in the day, as upbeat Tesla earnings and airline forecasts of profitability this quarter joined with data showing unemployment rolls at their lowest level in 52 years.
