U.S. stocks experienced a day of fluctuation on Thursday, as investors closely watched global central banks. Federal Reserve Chairman Jerome Powell testified before Senate lawmakers, stating that the Fed is likely to raise interest rates again in the coming months. Powell mentioned that the central bank is nearing its peak interest rate, as the economy is growing moderately and inflation is subsiding.
Throughout Powell’s testimony, the markets wavered back and forth. However, doubts regarding the extent of the Fed’s rate hikes have contributed to the positive performance of major U.S. indexes this year.
During midday trading, stocks were mixed. The Dow industrials were in the red, while the Nasdaq Composite gained and the S&P 500 remained relatively flat.
Big technology stocks outperformed, with Amazon.com experiencing a nearly 3% jump, recovering from losses incurred on Wednesday. The Federal Trade Commission had announced a lawsuit against the retail giant, accusing it of enrolling consumers without their consent into its Amazon Prime program. Other tech giants like Microsoft, Apple, and chipmakers such as Nvidia also saw gains.
On the other hand, bank stocks and shares of companies that own commercial real estate slid. Powell mentioned in his testimony that the Fed is working with lenders that are particularly exposed to the recent slump in commercial real estate.
Government bond yields saw an increase, with the yield on the 10-year U.S. Treasury note rising to 3.793% from 3.722% on Wednesday. When bond prices fall, yields tend to rise.
European markets faced pressure, with the Stoxx Europe 600 falling by 0.5%. The losses accelerated after the Bank of England’s latest interest-rate increase caught some traders off guard.
In the cryptocurrency market, Bitcoin recently traded near $30,000 after surpassing that level for the first time since April on Wednesday.
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Correction: In a previous version of this post, it was incorrectly stated that the Norwegian central bank raised interest rates by a quarter percentage point. The correct information is that it raised rates by half a percentage point.
What sectors of the U.S. stock market were negatively impacted by the Federal Reserve chairman’s testimony
U.S. Stock Market Skyrockets as Fed Signals Potential Interest Rate Increase
Thursday was a day of incredible volatility for U.S. stocks, driven by the keen attention of investors on global central banks. Federal Reserve Chairman Jerome Powell testified before Senate lawmakers, revealing that the Fed is likely to raise interest rates in the coming months. Powell acknowledged that the central bank is nearing the peak interest rate, as the economy continues to grow steadily and inflation remains under control.
Powell’s testimony sent shockwaves through the markets, causing them to fluctuate back and forth. However, doubts regarding the extent of the Fed’s future rate hikes have actually contributed to the positive performance of major U.S. indexes throughout this year.
During midday trading, stocks experienced a mix of outcomes. The Dow industrials saw some losses, while the Nasdaq Composite made gains and the S&P 500 remained relatively stable.
Tech giants stole the show, with Amazon.com leading the charge with an impressive 3% jump, recovering from losses incurred on Wednesday. The company faced a setback when the Federal Trade Commission filed a lawsuit against it, alleging that it enrolled consumers into its Amazon Prime program without their consent. Other tech powerhouses like Microsoft, Apple, and chipmakers such as Nvidia also saw significant gains.
However, the news wasn’t all positive for every sector. Bank stocks and shares of companies involved in commercial real estate took a hit. Powell highlighted in his testimony that the Fed is working closely with lenders particularly exposed to the recent slump in the commercial real estate market.
Government bond yields also experienced an increase, with the yield on the 10-year U.S. Treasury note rising to 3.793% from 3.722% on Wednesday. Typically, when bond prices fall, yields tend to rise.
Across the pond, European markets faced their own pressures. The Stoxx Europe 600 fell by 0.5%, and the losses were amplified by the Bank of England’s unexpected interest rate increase, catching some traders off guard.
In the exciting world of cryptocurrencies, Bitcoin has been making headlines. After surpassing the $30,000 mark for the first time since April on Wednesday, it was recently seen trading near that impressive level.
To stay ahead of market trends and make informed decisions, readers can subscribe to our free morning and evening newsletters. Delivered each weekday, they provide a comprehensive overview of the latest news and updates.
Correction: We would like to apologize for an error in a previous version of this post. It was incorrectly stated that the Norwegian central bank raised interest rates by a quarter percentage point. The correct information is that it raised rates by half a percentage point.
In a world where global central banks hold immense power, their actions have become pivotal in determining the trajectory of U.S. stocks. As they take center stage, fluctuating markets continue to be influenced by their decisions.
Central banks around the world are playing a critical role in shaping the fluctuating trajectory of U.S. stocks. Their decisions and policies are influencing market sentiment and investor behavior. It’s clear that in today’s interconnected global economy, the spotlight is firmly on these central banks as they take center stage in driving market movements.