Wall: ‘Dive’ into futures after the biggest increase in Fed interest rates since 1994

“Heavy” losses were recorded by the futures of Wall Street on Thursday, which were earlier moving upwards, as the US Federal Reserve (Fed) made the largest interest rate increase since 1994.

Particularly, the futures of the Dow Jones lose 582 points or 1.90% at 30,071 points while the futures of the S&P 500 fall by 89.75 points or 2.35% to 3,704 points. Alongside, Nasdaq futures slide by 329.75 points or 2.84% to 11,299.75 points.

Wall Street stocks closed higher on Wednesday, with the Dow and S&P 500 breaking a five-day losing streak. In particular, the Dow added about 304 points or 1%, while the S&P 500 strengthened by 1.46%. At the same time, the Nasdaq rose 2.5%.

It is noted that the Fed on Wednesday announced an increase in interest rates by 75 basis points, as was widely expected from the market.

“Clearly, the 75 basis point increase is unusually large and I do not expect moves of this magnitude to become a habit.” said the president of the FedJerome Powell, however, added that “based on current estimates, an increase of either 50 or 75 basis points seems likely at our next meeting.” Decisions will be made “from meeting to meeting,” he said.

Despite Wednesday’s recovery, the indices continue to decline in the week and the month and remain significantly below their records.

The S&P 500 and Nasdaq are in bear market, falling about 21% and 32% from their all-time highs in January and November, respectively. The Dow, meanwhile, is 17% below its January 5 high.

Uncontrolled inflation, which is at its highest level in 40 years, has weighed on indicators, as have fears of a slowdown in economic growth and a possible recession.

“The market was very prepared, even belatedly,” said Michael Wilson, Morgan Stanley’s chief strategic analyst for US markets, following the Fed announcement. He added that the increase would not solve the problem of inflation overnight.

“The risk of a recession is also increasing, because interest rates are rising even faster, and I do not think that will help the bond market,” he said.

Thursday’s financial data included weekly data for new unemployment benefit applications, with economists surveyed by Dow Jones forecasting 220,000 applications. At the same time, Adobe and Kroger will announce quarterly results.

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