Powell said in that the central bank’s inflation fight was far from done
Wall Street stocks fell on Wednesday after the Federal Reserve delivered another 0.75% rate hike, and Powell said in that the central bank’s inflation fight was far from done. He also noted that the ultimate level of interest rates will be higher than previously expected and it was “premature” to talk about pausing hikes. Against this backdrop, the Dow Jones Industrial Average slid 1.55%, the S&P 500 dropped 2.5%, while the Nasdaq Composite dove 3.36%. As technology stocks were among the worst performers of the day, Amazon, Netflix and Meta Platforms tumbled nearly 5% each.
Asian equities were down across the board on Thursday as investors continued to digest the Fed’s hawkish message. Chinese stocks reversed the recent rally amid uncertainty surrounding plans to phase out its strict zero-COVID policy by next year as Chinese authorities offered no official comment on the matter. The Shanghai Composite dipped 0.11% after a jump by 3% earlier in the week. Hong Kong’s Hang Seng tumbled 2.7% as technology stocks were sold off.
In Europe, stocks saw a negative open on Thursday as risk-off sentiment continued to dominate financial markets. Investors are nervous ahead of the Bank of England meting due later today. The UK central bank is expected to implement a 0.75% rate hike. At the same time, the bank could express a dovish tone, citing the deepening prospect of a recession. Earlier in the week, Goldman lowered its 2023 UK growth projections from -1% to -1.4% year-over-year.
Meanwhile, the US dollar failed to extend the Fed-induced rally to settle around 112.00 today. In a knee-jerk reaction to Powell’s press-conference, the greenback rallied across the board. Now, traders shift their focus towards the US NFP employment report due on Friday. Should the figures come in higher than expected, the dollar may see another rally ahead of the weekend. On the upside, the immediate barrier now arrives around 112.20, followed by the 112.50 zone and the 113.00 figure.
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