S&P 500 falls to lowest since July on fears Fed could push economy into recession
Stocks fell for a second session on Thursday after the Federal Reserve aggressively hiked rates, as investors grew concerned the central bank could push the economy into a recession as it struggles to rein in the rise of inflation.
The S&P 500 traded down 0.6% and fell to its lowest level since mid-July. The Nasdaq Composite slipped 1.2%. The Dow Jones Industrial Average was last down about 23 points.
Bond yields jumped again on Thursday, with 10-year and 2-year Treasury yields hitting new multi-year highs.
The Dow fell 500 points on Wednesday as the Fed maintained its aggressive stance, taking another 75 basis point hike and planning to take short-term rates to 4.4% by the end of 2022. D Other central banks around the world have followed the Fed’s lead, implementing their own large hikes overnight despite the potential repercussions on the economy.
Technology stocks and growth-oriented semiconductors fell on Thursday amid fears of slowing economic growth. Industrials and Consumer Discretionary were the worst performing sectors in the S&P 500, losing at least 1% each, due to their dependence on the economy.
“The Fed has paved the way for much of the world to continue with aggressive rate hikes, and that will lead to a global recession, and its severity will be determined by how long it takes inflation to come down” , said Ed Moya. , senior market analyst at Oanda.
Defensive stocks outperformed with drugmakers and consumer staples in the green on Thursday. Shares of Eli Lilly gained 4% after UBS updated the stock and said it could develop the biggest drug ever.