Wall St slides after The Fed raise rates by 0.25%
US stocks slide, and the Nasdaq is on the cusp of bear market territory in the aftermath of The Fed interest rate hike.
The Wall Street carnage continues after the much-anticipated Fed hike saw interest rates rise by 0.25% up from 2.25% to 2.5% on Thursday.
The US Federal Open Market Committee (FOMC) said in a statement on Thursday that some increases in rates will be needed as the economy is still steady.
'The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective over the medium term,’ they said in a statement.
IG market analyst, Kyle Rodda says Fed Chair Jerome Powell kept alluding to the bank’s “modelling” to justify its policy stance.
“The Fed’s numbers suggest good-times ahead for the US economy. While such a fact may prove true, the prevailing sentiment now is that the Fed is taking itself way off course.” Mr Rodda said.
Wall Street tumble
In the last hour of Wall Street trade on Thursday, US Tech 100 and the Dow Jones were below 23,000 hitting new lows, US treasuries fell, and Gold rallied through resistance to trade $US1263.
The Nasdaq tumbled 2.85%, at its sessions lowest, while the index, along with the Dow and the benchmark S&P500, cut losses.
Analysts say negative corporate results and forecasts to the decline in US stocks.
Energy stocks slid 2.8 % as oil prices dropped to their lowest levels since 2017, while technology and consumer stock were among
IG market analyst Kyle Rodda says that while Thursday’s US close was grim, Australia’s Friday investors have somewhat recovered from yesterday’s sell-off.
“Wall Street’s carnage continues, but SPI Futures are indicating a positive start for theSPDR S&P/ASX 200 Fundthis morning.” Mr Rodda said.
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