The Dow Jones Industrial Average closed more than 3 percent on Friday (Aug. 26) after Federal Reserve Chairman Jerome Powell signaled the Fed would continue to raise interest rates to curb inflation.
The Dow Jones Industrial Average closed at 32,283.40, down 1,008.38, or -3.03%, the S&P 500 closed at 4,057.66, down 141.46, or -3.37%, and the Nasdaq at 12,141.71, down 497.56, or -3.94%.
in the past week The Dow was down 4.2%, the S&P500 was down 4% and the Nasdaq was down 4.4%.
The New York Stock Exchange was under pressure after Powell said. The US economy will need to tighten its policy for a while before inflation can be controlled. This will result in slower economic growth, weaker labor market. and affecting the household and business sectors
“We will continue to raise interest rates. Until we are confident that our mission will be successful. Households and businesses may be affected by the Fed’s continued rate hike. But failure to stabilize prices will have a bigger impact,” Powell said at the Fed’s annual meeting in Jackson. Hole on Friday
In addition, Mr Powell said The Fed still needs to raise interest rates. And the Fed won’t cut its options. “Raise interest rates bigger than usual” in September.
In addition, the strong economic releases led the market to expect The Fed will continue to raise interest rates next month. The Fed is expected to raise interest rates as much as 0.75%.
All 11 stocks of the S&P500 index fell on Friday. led by Information Technology Group, Communication Services Group and the luxury goods group, which fell 3.9-4.3 percent.
Growth stocks and tech stocks also fell. by indian stocks And Amazon.com fell 9.2 percent and 4.8 percent, respectively, while Alphabet, Meta Platforms and Block Inc were down 4.1-7.7 percent.
Dell Technologies shares fell 13.5 percent on weak earnings expectations. Due to inflation and the sluggish economic outlook encourage consumers and businesses to tighten their spending.
Consumer finance company Affirm Holdings fell 21.3 percent on lower-than-expected full-year revenue forecasts.
The US Commerce Department said on Friday that Basic personal consumption expenditure (PCE) price index, excluding food and energy It is the Fed’s key gauge of inflation, up 4.6 percent in July year-on-year. It fell below analysts’ forecast of 4.8% and slowed from 4.8 percent in June.
The US Department of Commerce also revealed that Personal spending by U.S. consumers rose 0.1% in July, while analysts expected a 0.4% increase after a 1.0 percent gain in June. July and below analyst expectations of 0.5%.
In addition, the University of Michigan survey indicated that The Consumer Confidence Index rose to 58.2 in August, above the initial reading of 55.1 from 51.5 in July.