Stocks slumped after Federal Reserve Chair Jerome Powell said that the central bank still has “some ways to go” to knock down inflation while adding that it’s very premature to think about pausing rate hikes.
(Bloomberg) — Stocks slumped after Federal Reserve Chair Jerome Powell said that the central bank still has “some ways to go” to knock down inflation while adding that it’s very premature to think about pausing rate hikes.
The S&P 500 retreated after rallying when the Fed chief said that a slower pace of rate hikes could come as soon as December. Tech shares underperformed. Two-year US yields — which are more sensitive to imminent Fed moves — trimmed their slide.
Data Wednesday showed hiring at US companies rose in October by more than forecast, underscoring resilient labor demand despite the Fed’s efforts to cool the economy. A strong job market has fueled fast wage growth, contributing to rapid inflation and putting pressure on the Fed to aggressively tighten monetary policy.
The Treasury halted the longest string of cutbacks to its quarterly sales of longer-term debt in about eight years, showcasing the end of a period of historic reduction in the fiscal deficit.
In corporate news, Boeing Co.’s chief said the planemaker could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks and miscues. China has ordered a seven-day lockdown of the area around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.
Key events this week:
- Bank of England rate decision, Thursday
- US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
- ECB President Christine Lagarde speaks, Thursday
- US nonfarm payrolls, unemployment, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 1% as of 2:51 p.m. New York time
- The Nasdaq 100 fell 1.4%
- The Dow Jones Industrial Average fell 0.5%
- The MSCI World index fell 0.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was little changed at $0.9882
- The British pound fell 0.2% to $1.1465
- The Japanese yen rose 0.8% to 147.15 per dollar
Cryptocurrencies
- Bitcoin fell 0.2% to $20,443.92
- Ether fell 0.6% to $1,566.7
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.07%
- Germany’s 10-year yield advanced one basis point to 2.14%
- Britain’s 10-year yield declined seven basis points to 3.40%
Commodities
- West Texas Intermediate crude rose 1.2% to $89.39 a barrel
- Gold futures were little changed
–With assistance from Lu Wang.
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