US stocks tumbled overnight after Fed Chairman Powell’s remarks

U.S. stocks swung between negative and positive territory overnight after investors sold stocks and government bonds after Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment control inflation through a rapid series of interest rate hikes.

Teleprinter Security Last Change Change %
Me: DJI DOW JONES AVERAGES 34552.99 -201.94 -0.58%
SP500 S&P500 4461.18 -1.94 -0.04%
I: COMP NASDAQ COMPOSITE INDEX 13838.460187 -55.38 -0.40%

The S&P 500 edged down 1.94 points, or less than 0.1%, to close Monday at 4461.18 on comments from Powell about the possibility of more aggressive interest rate moves to tame inflation. Treasury yields rose on his comments, hitting their highest level since May 2019.

The technology-focused Nasdaq composite index lost 55.38 points, or 0.4%, to 13,838.46, while the Dow Jones Industrial Average slipped 201.94 points, or 0.6%, to 34,552. .99.

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Stocks ended slightly lower Monday on Wall Street after rebounding for much of the day.

The 10-year Treasury yield jumped to 2.30% from 2.14% on Friday night.

U.S. stocks swung between negative and positive territory overnight after investors sold stocks and government bonds after Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment to control inflation through a ra (AP Photo/Richard Drew)

Small company stocks fared less well than the broader market. The Russell 2000 index fell 1% to 2,065.94.

In remarks to the National Association of Business Economists, Powell said the Fed would raise its benchmark short-term interest rate by half a point at multiple Fed meetings, if necessary, to slow inflation. . The Fed has not raised its key rate by half a point since May 2000.

The central bank announced a quarter-point rate hike on Wednesday, its first interest rate hike since 2018. Stocks rallied after the announcement and had their best week in more than a year. . The central bank is expected to raise rates several times this year.

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Before Russia’s invasion of Ukraine added another wave of global economic uncertainty to the mix, some Fed officials had said the central bank had better start raising rates by half a dollar. point in March.

Given growing recession risks, Clifford Bennett, chief economist at ACY Securities, said he thinks the Fed should act cautiously.

“Europe is likely to go into recession and with the world experiencing high energy and food prices, the poor will be disproportionately affected. And rising interest rates will have no impact on this. wave of war-induced inflation,” he said.

This week, there isn’t much US economic data to give investors a better idea of ​​how companies and investors are handling rising inflation.

Russia’s invasion of Ukraine has heightened fears that inflation will worsen, pushing up energy and commodity prices. Oil prices have risen more than 45% this year, and wheat and corn prices have also jumped.

Justin Flinn There isn’t much US economic data this week to give investors a better idea of ​​how companies and investors are handling rising inflation. ((AP Photo/Richard Drew/Associated Press)

Boeing fell 3.6% after a 737-800 plane operated by China Eastern Airlines crashed in China with 132 people on board. Reports on Tuesday said there were no survivors. China Eastern shares fell 7% on Tuesday.

Meanwhile, Asian stocks were up on Tuesday as investors watched the war in Ukraine and inflationary risks, including rising energy costs.

Benchmarks rose in Japan, South Korea, Australia and China.

Russia’s war on Ukraine and Western sanctions on Russia are adding to concerns about disruptions to Europe’s energy supply and soaring prices that could hamper progress towards economic recovery from the pandemic.

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“With no progress in the peace talks, reports are circulating that the EU is preparing the ground for an embargo on Russian oil. Rising energy prices will hurt the EU economy enormously “said Stephen Innes, managing partner at SPI Asset Management.

Benchmark U.S. crude added $2.89 to $115.01 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. Brent, the international standard, jumped from $3.78 to $119.40.

Japan’s benchmark Nikkei 225 jumped 1.4% to 27,202.05. Australia’s S&P/ASX 200 gained 0.9% to 7,341.10. The South Korean Kospi edged up 0.8% to 2,708.63. Hong Kong’s Hang Seng rose 1.8% to 21,606.53, while the Shanghai Composite recouped earlier losses to rise 0.3% to 3,263.83.

Hong Kong-traded shares in e-commerce giant Alibaba Group jumped 8% after the company increased its share buyback to $25 billion from $15 billion on Tuesday to support a share price that has fallen by more than half since the ruling Communist Party tightened control. on tech industries by launching regulatory crackdowns.

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In currency trading, the US dollar hit six-year highs against the Japanese yen, hitting 120 yen. It was trading at 120.35 yen by mid-afternoon, down from 119.47 yen. The euro traded at $1.0991, down from $1.1016.

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