The US Federal Reserve (Fed) raised interest rates by 3 yards as expected on Wednesday (21st) and sent a signal to continue tightening policy, driving the four main US stock indexes to break in late trading, and ended in a blackout, with the Dow Jones falling more than At 500 points, the S&P 500 and the Nasdaq both fell more than 1.7%, and Feihan fell almost 1%.
All four major indexes closed at intraday lows, with the Dow hitting its lowest close since mid-June, and the S&P and Nasdaq closing at their lowest since late June and early July , respectively.
After raising interest rates three times in a row to a range of 3-3.25%, Fed Chairman Powell on Wednesday reiterated his determination to tame inflation, hinting that similar steps could continue in November.
The Fed expects the benchmark interest rate to rise to 4.4% by the end of the year, and it is estimated that the final interest rate will reach 4.6% next year, which is higher than the previous forecast. Given that there are only 2 interest rate meetings. after this year, this means the Fed can raise interest rates another 3 yards before the end of the year. In addition, the interest rate dot plot shows that officials do not expect a rate cut until 2024, and the headline inflation rate is not expected to fall back to the Fed’s 2% target until 2025.
As traders digested the interest rate decision and Powell’s latest comments, US stocks fell sharply in late trading after the intraday shock. Treasury yields rose sharply. The 2-year US Treasury yield rose once to 4.1%, reaching the highest level since 2007. , the 10-year US Treasury yield jumped to 3.6%, and the US dollar index hit a new 24-year high.
As for the international situation, Russian President Vladimir Putin announced on Wednesday that Russia is committed to a “partial military movement” and will make no effort to defend Russian territory. The comments were interpreted by the outside world as a possible use of nuclear weapons, prompting strong condemnation from Western countries.
EU foreign ministers are expected to hold an emergency meeting on Wednesday to discuss whether to impose further sanctions on Russia and supply arms to Ukraine.
Regarding the epidemic, before the deadline, data from Johns Hopkins University in the United States showed that the number of confirmed cases worldwide had reached 613 million, and the number of deaths had exceeded 6.53 million. About 12.3 billion vaccine doses have been administered in 184 countries worldwide.
The performance of the four major US stock indexes on Wednesday (21st):
The five kings of science and technology are all in ink. Apple (AAPL-US) fell 2.03%; Meta (FB-US) fell 2.72%; Alphabet (GOOGL-US) fell 1.84%; Amazon (AMZN-US) fell 2.99%; Microsoft (MSFT-US) fell 1.44%.
Only Walmart in the Dow Jones posted a dividend. Walmart (WMT-US) rose 0.91%; Pioneering Heavy Industries (CAT-US) fell 3.39%; American Express (AXP-US) fell 3.11%; JPMorgan Chase (JPM-US) fell 2.88%; Disney (DIS-US) fell 2.86%; Verizon (VZ-US) fell 2.73%; Visa (V-US) fell 2.63%; Nike (NKE-US) fell 2.57%.
Half of the constituent stocks fell more and rose less. Ke Lei (KLA-US) fell 2.13%; Intel (INTC-US) fell 1.69%; Texas Instruments (TXN-US) fell 1.66%; ASML (ASML-US) fell 1.52%; Broadcom (AVGO-US) fell 1.39 %; Micron (MU-US) fell 1.38%; Applied Materials (AMAT-US) fell 1.17%; NXP (NXPI-US) fell 1.08%; AMD (AMD-US) fell 1.02%; Qualcomm (QCOM-US) fell 0.12%; huida (NVDA-US) rose 0.65%.
Taiwan stock ADR all weakened. TSMC ADR (TSM-US) fell 1.29%; UMC ADR (UMC-US) fell 1.28%; ASE ADR (ASX-US) fell 0.72%; Chunghwa Telecom ADR (CHT-US) fell 0.72%.
Meta Platforms was down 0.4 percent in late trade on Wednesday. The Wall Street Journal (WSJ) reported that Meta plans to cut costs by at least 10% in the next few months, including reducing overheads and consulting budgets, but mainly through business restructuring and layoffs.
On the other hand, in the face of an economic slowdown, Walmart appears more cautious in hiring during the holiday shopping season, with the company planning to hire 40,000 seasonal and full-time workers this year, down from 150,000 last year. The stock fell 0.14% after hours.
Salesforce (CRM-US) announced its latest profit target for fiscal year 2026 at the investor conference, including a non-GAAP margin of more than 25%, and reiterated its revenue forecast of $50 billion, boosting the stock 1.6% after that. the market.
Benefiting from high house prices and shortages of raw materials and labor leading to housing shortages, real estate developer Lennar (LEN-US) announced that its revenue and profit in the latest quarter beat market expectations, and that its stock price is edging. up 0.71% after market.
- US existing home sales reported an annual total of 4.8 million in August, 4.62 million expected and 4.81 million previously
- August US current home sales annualized monthly rate of -0.4%, the previous value -5.9%
- US AEA crude oil inventories increased by 1.142 million barrels last week, compared to the previous value of 2.442 million barrels
Wall Street Analysis
Seema Shah, global chief strategist at Principal Global Investors, said: “Ball was pretty much showing his inner Paul Volcker today when he talked about strong and swift Fed action that is likely to continue, trying to get get rid of painful inflation pressure and avoid worse. future situation.” Shah believes a soft landing is almost impossible under the new rate forecast.
Greg Bassuk, chief executive of AXS Investments, said today’s Fed action, along with the market’s roller coaster, underscores the unease among investors as uncertainty grows due to factors such as high inflation, corporate profit warnings and geopolitical concerns. “
Mike Loewengart, head of portfolio modeling at Morgan Stanley, said: “The market seems very keen to hear that the rate hike cycle is coming to an end, but that’s certainly not what we’re getting today. Importantly , the Fed’s policy is lagging. , so it may take time to see inflation approach the Fed’s target.”
Figures are updated before the deadline, please refer to the actual quote.