US stocks end sharply lower as Fed reaffirms interest rate tightening

New York stock markets recorded a strong fall this Friday (26).

The fact that the Federal Reserve (Fed, the US central bank) reinforced its commitment to raise rates to contain inflation put pressure on stocks. Among the sectors, technology and communications services were among the biggest losses, causing the Nasdaq to drop the most.

The Dow Jones Industrial Average closed down 3.03% at 32,283.40 points, the S&P 500 fell 3.37% to 4,057.66 at its low for the day, and the Nasdaq dropped 3.94% to 12,141. .71 points. On a weekly basis, the Dow Jones was down 4.22%, the S&P 500 was down 4.04% and the Nasdaq was down 4.44%.

This Friday, the Dow Jones index lost just over a thousand points (1,008.38). Fed Chair Jerome Powell gave a long-awaited speech at the Jackson Hole symposium in which he said the priority right now is to get inflation back to the 2% target.

According to him, the commitment to price stability is “unconditional”, even if the tightening causes “some pain” for families and businesses in the US. For the CIBC and other analysts, Powell dismissed the idea that a easing of monetary policy could come quickly. The Fed also published analysis according to which the US will emerge from the pandemic with slow growth.

Among stocks in focus on US stocks, 3M fell 9.54%, after losing in court an attempt to guarantee bankruptcy protection, in a dispute involving military hearing protectors manufactured by the company. Salesforce, in turn, fell 4.97%, after publishing a balance sheet considered negative.

Among other weighty stocks, Apple closed down 3.77%, Amazon fell 4.76%, Alphabet dropped 5.41% and Microsoft, 3.86%. Boeing recorded a 2.86% drop and, among banks, Citigroup lost 4.38% and Morgan Stanley, 3.45%.

Also on the news, the US and China announced an agreement on audits that US officials will be able to do on Chinese company records so that their papers can be traded on US soil.

*With information from Dow Jones Newswires