US stocks fall for third straight session as rate hikes fuel recession fears

4:21 p.m .: Benchmarks at the pace to end the week down

The Dow Jones closed Thursday down 108 points, 0.4%, at 30,076, the Nasdaq Composite lost 153 points, 1.4%, at 11.067 and the S&P 500 was down 32 points, 0.8% , at 3,758. The Dow nearly salvaged a winning day, turning green in the afternoon, but ultimately the benchmarks each fell for the third straight session.

The indices are all set to lose ground over the week. Investors continue to react to a 75 basis point hike in interest rates by the Federal Reserve.

“The Fed has paved the way for much of the world to continue with aggressive rate hikes, and that will lead to a global recession, and its severity will be determined by how long it takes inflation to come down.” , said Ed Moya. , senior market analyst at Oanda, as reported by CNBC.

12:05 p.m .: Wall Street avoids risk

U.S. indices were firmly in the red by midday as losses in tech stocks, including a 27% decline this year for the S&P 500 tech sector, fostered a sense of risk aversion among investors.

By noon, the Dow Jones Industrial Average was down 120 points at 30,063, the S&P 500 was down 30 points at 3,761, while the Nasdaq Composite was down 145 points at 11,075.

Michael Hewson, chief market analyst at CMC Markets UK, said after the sharp falls seen yesterday, US markets continued their softer theme.

“The big market story on Wednesday was undoubtedly the Federal Reserve’s decision to raise interest rates by 75 basis points. Although widely expected and in fact not as aggressive as some had suggested, it still caused some volatility,” Hewson wrote in a note.

“The tech-heavy U.S. index NASDAQ is an example of this, dropping 200 points immediately after the news before rising nearly 300 points and then ending the day at a session low. ‘one day on the index at 54.12% vs. 29.39% on the month,’ Hewson wrote.

Hewson also noted that Robinhood Markets and Virtu Financial posted gains after the U.S. Securities and Exchange Commission said it would halt before allowing the order flow payment ban, which is a main source of income for both.

“Apple shares are also lagging on reports that it is cutting iPhone 14 production due to weak demand and focusing its attention on the iPhone 14 Pro where demand appears to be holding up better,” wrote Hewson.

Among the main drivers were pharmaceutical companies Eli Lilly and Merck, up 3.7% and 3%, respectively. Valero Energy Inc (NYSE:VLO) rose 3.8% and Royal Caribbean reversed yesterday’s fall, as it rose 2.8%.

On the downside, Factset Research fell 8.5% due to missed Q4 earnings information, while Lucid Group fell 7%, Caesars Entertainment fell 6.4% and Airbnb (NASDAQ: ABNB) fell 6%.

11:45 am: Proactive titles in North America:

Facebook owner Meta aims to cut costs by at least 10% in coming months – report

Maple Gold Reports Impressive Initial Assay Results from Phase II Drilling at Eagle, Quebec; appoints Kiran Patankar as CFO

Electra Battery Materials signs three-year agreement to supply battery-grade cobalt to EV battery producer

Liberum Capital Puts Atlantic Lithium Target Price Under Consideration, Repeats Buy Rating After Ewoyaa PFS

Mountain Boy Minerals says recent geophysical work from the Telegraph Project highlights district-scale potential for porphyry

Nextleaf launches new High Plains brand to bring high flavor profiles to the vape market

GlobalBlock Digital Asset Trading Reveals Positive Trade and Trading App Update

Progressive Planet Solutions begins cement field testing after receiving a custom-designed batch ball mill

Thunderbird Entertainment Says Great Pacific Media’s Highway Thru Hell Highlights Highway Heroes Following 2021 BC Floods In Upcoming 11th Season

Hapbee Technologies launches new wellness routines for sleep and recovery by MLB pitcher Grant Dayton

Zoglo’s Incredible Food will sell its plant-based products at Save-on-Foods stores in Western Canada

American Resources Says Subsidiary Signs Memorandum of Understanding with USA Rare Earth Magnets to Create First National Supply Chain for Rare Earth Magnets

Nextech AR launches Toggle3D AI-powered SaaS software platform for the growing CAD-3D model market

Fireweed Metals Adds Jill Donaldson, Senior Corporate and Securities Lawyer, to its Board of Directors

LithiumBank initiates hydrogeological study at Park Place Lithium Brine project in Alberta

Yorkville Asset Management acquires BC healthcare provider Back in Motion Health

Perk Labs strengthens its sales team with new director of sales Manon Roy

Think Research Appoints Business Veteran John Hayes as Permanent Chief Financial Officer; promotes Patrick Craib to COO

Talon Metals Unveils New Record Drilling Result at Tamarack Project in Minnesota

Numinus Wellness announces the opening of a new clinic with increased capacity in Montreal

Kidoz expects revenue of $16-18 million in 2022, with EBITDA remaining positive for three years in a row

Power Nickel begins second round of drilling at the Nisk project in Quebec following a resource estimate

Plurilock Security completes first sale of access control solution to California-based legal services provider

9:45 am: Wall Street reacts to unemployment claims in the United States

Major US indices opened mixed as traders reacted to layoffs in the US labor market.

At the start of trading, the Dow Jones Industrial Average was up 0.09% at 30,206, the S&P 500 was down 0.03% at 3,787, while the Nasdaq Composite was down 0.17 % to 11,200.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said initial claims rose to 213,000 for the week ending September 17, from a lower-revised 208,000 but below consensus of 217,000.

“We expected a sharp increase in claims this week, on the grounds that last week’s unexpected drop to 213K was a pre-Labor Day distortion. The mere 5,000 increase in today’s report is not definitive proof that the claims trend has fallen further, but we are now very much looking forward to next week’s report. Four consecutive draws below 220,000 would be pretty compelling,” Shepherdson wrote in a note.

Shepherdson noted that the US Federal Reserve is using the strength of the US labor market as a reason to raise interest rates, including its three most recent hikes of 75 basis points.

“For a Fed looking for signs of a weaker labor market, the recent numbers won’t be comforting, though they say nothing about the pace of gross hiring; claims are just one indicator of the pace of gross layoffs,” he said, adding that payroll is the difference between the two.

“It is possible that the bar for layoffs will remain very low even as companies gradually reduce their hiring plans, but the Fed has made it clear that it wants a significantly more flexible labor market, and we are not sure that the demand for labor has slowed enough to bring this about without at least some increase in layoffs,” Shepherdson said.

6:30 a.m.: More caution anticipated

US stocks are set to open flat or lower on Thursday after the Federal Reserve, as expected, announced a 75 basis point (bp) interest rate hike yesterday and signaled that further hikes are likely.

Futures on the Dow Jones Industrial Average rose 0.1% in premarket trading, while those on the S&P 500 lost 0.1% and contracts on the Nasdaq-100 fell 0.2% .

“’Ugly’ is a good word to describe the mood of the market this morning. The sell-off is likely to continue,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noting that Wednesday’s falls are expected to deepen.

Stocks initially followed the widely expected decision by the Fed to make its third consecutive 75 basis point interest rate hike, but the hawkish tone of Fed Chairman Jerome Powell at the conference press that followed, sent shares plummeting.

“We need to put inflation behind us. I wish there was a painless way to do this. There isn’t,” Powell said. His words were a stark reminder that more interest rate hikes are looming.

It remains to be seen whether the Fed can steer the world’s largest economy into a so-called soft landing, but for now Powell’s remarks underscore that rate setters are focused on fighting the tide. inflation which remains stubbornly around its highest level for 40 years.

Ozkardeskaya noted that pricing officials’ projections far exceeded market expectations. “Most of them are in favor of sending rates above 4.25% by the end of the year; this means that there must be at least another 75 basis point hike on the pipeline.

“Then, if we’re lucky, we could end the year with a 50 basis point hike, which could be followed by a few 25 basis point hikes before the Fed stops and takes a break. “, she added.

Elsewhere, Russia’s renewed resolve in its war against Ukraine spooked markets and reduced risk appetite. Russian President Vladimir Putin has declared partial mobilization and the country is preparing to mobilize 300,000 reservists.

“This is a major escalation in the war, because so far the Russians have deployed around 150-200,000 troops. So sending 300,000 more men is a big deal,” Ozkardeskaya said. “Putin’s announcement, which fell like a bombshell on investors already stressed by the Fed’s decision, yesterday sent capital into safe-haven assets.”

Some of these outflows are expected to continue today as central banks around the world move to raise interest rates amid mounting price pressures.

Contact the author at [email protected]

Comments are closed.