New York Stock Exchange Façade (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)
The New York Stock Exchange plunged at the opening on Wednesday as bond rates rose to a three-year high before news from the Fed.
Around 2:00 pm Greenwich Mean Time, the Dow Jones fell 0.72%, the Nasdaq fell 2.11% to below 14,000 points, and the S & P 500 fell 1.16%.
The index ended in the red on Tuesday after a statement by US central bank officials about the need to hit inflation “hard”.
The 30 Dow Jones Industrial Averages fell 0.80% to 34,641.18 points. Nasdaq was primarily technical, down 2.26% to 14,204.17 points. The S & P 500 fell 1.26% to 4,525.12 points.
Interest rates on the Treasury bill for 10 years continued to rise on Wednesday, reaching 2.62% from 2.54% the day before. This is the peak since March 2019, long before the Covid-19 pandemic.
These more hawkish remarks on interest rates, issued by Federal Reserve Governor Lael Brainard, were usually rather accommodative monetary policy partisans and attracted market attention.
In particular, another monetary tightening aimed at curbing stubborn inflation, which the Fed has been slow to take seriously since officials advocated a “quick” reduction in the Fed’s balance sheet from May. There was a plan.
“Even if justified for inflation, we can no longer say that we have not witnessed a serious monetary tightening,” said Gregori Volokhine of Meeschaert Financial Services.
Brafing.com’s Patrick O’Hare said Rael Brainard’s view as Fed vice chairman seeking Senate approval “caused a sort of turmoil in the Treasury and created new tensions. “.
Analysts mention the 2013 “tapered tram” or turmoil in the bond market. During this time, investors have responded badly to the news that they are planning to reduce the Fed’s financial support, which began with the 2008 financial and real estate crisis.
“This will pay attention to the release of the Fed’s minutes,” underlined Jeffreys’ Brad Bechtel earlier in the afternoon.
The minutes of the central bank’s last meeting should provide details on the position of members of the financial committee on the scope of future rate hikes and the pace of asset reductions on the balance sheet.
Interest rates on 30-year mortgages, the benchmark for the US market, crossed the 5% threshold on Wednesday for the first time in more than 10 years.
Mortgage applications have also declined for the fourth straight week, according to the Mortgage Bankers Association on Wednesday.
As the United States and the European Union prepare a series of new sanctions against the Kremlin, the progress of the war in Ukraine continued to be a central concern for investors.
Meanwhile, the spirit of low-cost carriers, which have been over-bid from JetBlue after the first offer from Frontier Airlines, rose 2.30% to $ 26.28 after rising more than 20% the day before the store closed. became.
The JetBlue title, which made a $ 3.6 billion counter offer in Spirit, was higher than the Frontier title and melted 6.2%. That of the frontier lost 8.64%.
Twitter has lost some weight (-1.76%) after being celebrated on Wall Street recently when Tesla boss Elon Musk announced that he has a significant stake in social networks and made him the largest shareholder. Was there.
Seven of the 11 in the S & P 500 sector declined, starting with consumer products (-2.46%) and information technology (-2.21%), and going through banks (-0, 67%) and real estate (-0.34%). did.