- Defensive stocks limit market losses
- Moderna slides after mixed data from flu vaccine study
- US markets closed Monday for President’s Day
- Indices: S&P 500 -0.79%, Nasdaq -1.24%, Dow -0.08%
February 17 (Portal) – Wall Street fell on Friday, weighed down by Microsoft and Nvidia as investors feared inflation and a strong US economy could prime the Federal Reserve for more rate hikes.
The main indices were on track to lose ground this week as economic data pointed to elevated inflation, a tight labor market and resilience in consumer spending, giving the Fed more leeway to raise borrowing costs.
Goldman Sachs and Bank of America forecast three more rate hikes this year, each up a quarter of a point from their previous estimate of two hikes.
Traders expect at least two more rate hikes and expect the Fed rate to peak at 5.3% by July as the central bank tries to cool the economy and reduce inflation.
“For the past two weeks, a dark cloud has rolled over the stock market based on a higher water mark for the Fed’s interest rates,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
last update
Watch 2 more stories
“Employment numbers are not weakening and it is difficult to enter a recession at the same time as a strong labor market. That means the Fed could hit the button and hike rates,” Dollarhide said.
S&P 500 Trading
Of the S&P 500’s 11 sector indices, seven fell, led by Energy (.SPNY) down 3.75%, followed by a 1.73% loss in Information Technology (.SPLRCT).
microsoft corp
The CBOE Volatility Index (.VIX), also known as Wall Street’s fear gauge, traded above 20 points for the second straight day.
In afternoon trade, the S&P 500 fell 0.79% to 4,058.27 points.
The Nasdaq fell 1.24% to 11,708.36 points, while the Dow Jones Industrial Average fell 0.08% to 33,668.55 points.
The S&P 500 is up about 6% so far in 2023, while the Nasdaq has rallied 12% after deep losses last year.
Adding to the darkness, Fed Governor Michelle Bowman said the central bank would need to keep raising interest rates until it made much more progress on fighting inflation. Richmond Fed President Thomas Barkin said the central bank has yet to hike rates but could stick with hikes of a quarter point.
Moderna Inc (MRNA.O) fell 5% after its experimental messenger RNA-based influenza vaccine returned mixed results in a study.
Deere & Co (DE.N) rose more than 8% after the world’s largest farm equipment maker increased its full-year profit and beat quarterly earnings expectations.
Lithium miners Livent Corp (LTHM.N), Albemarle Corp (ALB.N) and Piedmont Lithium Inc (PLL.O) all fell more than 10% on concerns over weakness in Chinese prices for the electric vehicle battery metal.
The US stock exchanges will remain closed on Monday for Presidents’ Day.
In the US stock market (.AD.US), falling stocks outweighed rising ones by a ratio of 1.7:1.
The S&P 500 marked six new highs and one new low; The Nasdaq recorded 55 new highs and 57 new lows.
Reporting by Johann M. Cherian and Sruthi Shankar in Bengaluru; Editing by Marguerita Choy
Our standards: The Trust Principles.