The stock indices of United States fell on Thursday (16), with growth stocks suffering the impact of the liquidation, after the biggest interest rate hike by the Federal Reserve since 1994 to fight decades-old inflation has fueled worries of a recession.
All 11 major S&P sectors were down in morning trading. The energy and discretionary sectors were the main losers, down 4.2% and 3.6%, respectively.
Mega-cap growth companies such as Amazon, Microsoft, Apple and Tesla fell between 2.5% and 6%, also pressured by rising earnings from the Treasure from United States.
At around 10:00 am Brasília time, all sectors of the dow jones traded in the red, while 496 components of the S&P 500 index fell.
The benchmark broke a five-session decline on Wednesday after the Fed’s 0.75 percentage point interest rate hike met market expectations.
Stocks have been under pressure for most of the year on growing concerns about rising inflation and higher borrowing costs, with the central bank’s latest projection of a slowing US economy and rising unemployment in the coming months only fueling these concerns.
“We see it increasingly likely that a recession and higher unemployment will be needed to tame inflation, with such a grim macro picture looming over the markets,” said Geir Lode, head of global equities at Federated Hermes.
Wells Fargo said the odds of a recession are now more than 50% after the fed .
O S&P 500 it is down 22.6% year-to-date and is in a bearish market as investors grapple with a sharp slowdown in growth. The indices Nasdaq Composite and S&P 500 are expected to have their 10th weekly decline in the last 11 weeks.
“Technically, the market remains weak,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The Fed’s rally is fading as investors question the central bank’s ability to orchestrate a soft landing. The bear market is still in full force and has not yet reached a level where stocks can comfortably recover.”
By 10 am, the Dow was down 692.04 points, or 2.26%, while the S&P 500 was down 2.79% and the Nasdaq Composite was down 3.21%.
Source: CNN Brasil
