Stocks fall as interest rates rise in the markets, and retail sales miss out

US stocks fell Thursday morning as Wall Street reeled Interest rate hike again by Fed officials and assessing similar moves by central bank officials across the Atlantic. A disappointing reading on consumer spending also weighed on sentiment.

The European Central Bank and the Bank of England The US Federal Reserve follows in raising interest rates by 50 basis points Thursday morning. The Bank of England raised rates in the country to their highest levels since 2008.

S&P 500 Index (^ The Salafist Group for Preaching and Combat(down by 1.4%, while the Dow Jones Industrial Average (^ DJI) fell about 380 points, or 1.1%. Nasdaq Technology Heavy Composite (^ ix) decreased by 1.7%.

Meanwhile, the government’s retail sales report Show spending fell sharply November is when the main holiday shopping season begins. The latest retail sales reading showed a decrease of 0.6% from the previous month but an increase of 6.5% from November 2021.

Tesla (TSLA) opened Thursday after showing CEO Elon Musk’s regulatory filing It sold approximately 21,995,000 shares of the company’s stock, or approximately $3.6 billion, during the three-day period ended Dec. 14. Tesla shares are down about 20% in December so far and about 55% year-to-date after the sale of the electric car giant has accelerated in recent days.

Linnar shares (flexible) fell by 3% at the beginning of trading, even after the homebuilder reported about 11% jump in fourth-quarter earnings late on Wednesday.

The moves on Thursday morning track declines across the major averages in the previous trading session after the Federal Reserve delivered a 50 basis point increase in its benchmark interest rate. Fed Chairman Jerome Powell also confirmed that he and his colleagues will continue to raise interest rates in 2023 to the expected upwardly revised final rate of 5.1%.

Wednesday’s half-percentage-point hike, which brought the federal funds rate to a range of 4.25%-4.5%, represented a slowdown from the 75 basis-point increases in Each of the past four policy meetings of the Federal Reserve Most ferocious rally since the 1980s.

Despite the slowdown in the pace and size of the increases, Powell has consistently emphasized that the work he and his colleagues have done to tackle stubbornly high inflation is far from over.

Federal Reserve Chairman Jerome Powell holds a press conference following the announcement that the Federal Reserve will raise interest rates by half a percentage point, at the Federal Reserve Building in Washington, US, on December 14, 2022. REUTERS/Evelyn Hochstein

“Now that we’ve raised interest rates 425 basis points this year and we’re in constrained territory, it’s not so important now how fast we go — it’s very important to think, what’s the bottom line?” Powell said at a news conference with reporters on Wednesday. “At a certain point, the question will become, How long are we going to stay tied up?”

The Fed’s “dot plot,” which shows policymakers’ estimates for interest rates, projected that the federal funds rate would rise in 2023 to between 5.1% and 5.4% and in 2024 it would remain at an average of 4.1% from a previous estimate. 3.9% – the change that strategists point to as the only real surprise revision to the central bank’s outlook.

“These estimates are significantly more hawkish than previously forecast and are not pre-tracked as is usually the case with the Federal Reserve,” William Blair macro analyst Richard de Chazal said in a note.

Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @employee

Click here for the latest Yahoo Finance stock tickers

Click here for the latest stock market news and in-depth analysis, including the events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for apple or android

Follow Yahoo Finance on Twitter TwitterAnd the FacebookAnd the InstagramAnd the FlipboardAnd the linkedinAnd the YouTube

Leave a Reply

Your email address will not be published. Required fields are marked *