NEW YORK (Archyde.com) – The New York Stock Exchange ended sharply lower on Wednesday following a choppy session as the Federal Reserve (Fed) hiked rates as expected by 25%. basis points, while hinting that it might take a break in its monetary tightening due to the jolts in the financial sector.
The Dow Jones index fell 1.63%, or 530.49 points, to 32,030.11 points.
The broader S&P-500 lost 65.90 points, or 1.65%, to 3,936.97 points.
The Nasdaq Composite fell for its part by 190.15 points (1.60%) to 11,669.96 points.
While the session was until then sluggish, the three main indexes of Wall Street moved sharply higher following the publication of the Fed’s statement at the end of its two-day monetary policy meeting.
They then tipped into the red, as investors parsed the statement and digested comments from U.S. central bank President Jerome Powell.
“The market was encouraged when it saw that the Fed was considering a full pause, then disappointed when Powell clarified that its hands were not tied and might continue to raise rates if necessary,” he said. said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
The US central bank raised its interest rates by 25 basis points as expected and, while it did not rule out the possibility that further tightening was necessary, it hinted at a pause in its campaign to raise interest rates. rates, given the turmoil in the financial sector.
Wall Street saw its gains wiped out following Jerome Powell said in the wake of the release that he would use all the tools at his disposal to ensure the stability of the US banking sector, while reiterating a promise to the Federal Reserve to fight inflation.
There are still fears that the Fed’s aggressive inflationary measures will push the US economy into recession, fears that the turmoil in the banking sector – including the failures of Silicon Valley Bank and Signature Bank – have all but eased.
“The Fed got scared with Silicon Valley Bank and the other bank jerks,” said Tim Ghriskey, strategist at Ingalls & Snyder, in New York, adding that the situation might help the central bank curb inflation without having to raise rates aggressively.
After two sessions in the green, the banking sector fell back into the red, with all the major sectors of the S&P-500 having declined.
On the stock side, First Republic plunged 15.5% on concerns regarding a potential restructuring or the need to seek government aid.
Nike fell 4.9% following revising its full-year revenue forecast upwards but warning Tuesday of pressure on its margins.
* The reminder of the session in Europe: [.EUFR]
* TO FOLLOW on Thursday:
(French version Jean Terzian)
par Stephen Culp