Dow plunges in perfect storm for stocks
Federal Reserve sees rates reaching 5.1% in 2023
Don't trust the Fed, trust the market: Ryan Payne
Payne Capital Management president Ryan Payne explains why the Fed will have to pivot and stop raising rates as inflation declines on 'Varney & Co.'
Investors dumped stocks on Thursday as more headwinds emerge for the U.S. economy as the Federal Reserve stays the course in raising interest rates.
The Dow Jones Industrial Average lost 764 points, or 2.2%, as the broader markets faced the worst session since November.
Dow Jones Industrial Average
IBM and Apple paced the Dow's selloff, while Verizon remained in the green.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| IBM | INTERNATIONAL BUSINESS MACHINES CORP. | 227.39 | -0.02 | -0.01% |
| AAPL | APPLE INC. | 239.59 | +2.26 | +0.95% |
| VZ | VERIZON COMMUNICATIONS INC. | 43.85 | -0.52 | -1.17% |
The Nasdaq Composite shed over 3.4%, weighed down by Netflix and Meta.
Nasdaq Composite
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NFLX | NETFLIX INC. | 897.74 | +10.93 | +1.23% |
| META | META PLATFORMS INC. | 592.83 | +18.51 | +3.22% |
And all 11 of the S&P’s largest sectors fell, led by tech, materials and industrials, while energy and utilities fell the least.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XLK | TECHNOLOGY SELECT SECTOR SPDR ETF | 233.73 | +2.15 | +0.93% |
| XLB | MATERIALS SELECT SECTOR SPDR ETF | 94.78 | +0.48 | +0.51% |
| XLI | INDUSTRIAL SELECT SECTOR SPDR ETF | 143.99 | +0.81 | +0.57% |
S&P 500
Weak readings on retail sales and manufacturing sent ripples through the markets 24 hours after Fed policymakers said interest rates will rise to 5.1% in 2023, higher than initial forecasts, in the quest to bring the 7.1% inflation rate down.
FED SLOWS INTEREST RATE INCREASES WITH 50-BASIS-POINT HIKE, BUT SIGNALS MORE TO COME
"The largest amount of pain, the worst pain would come from a failure to raise rates high enough and from us allowing inflation to become entrenched in the economy," Fed Chairman Jerome Powell said Wednesday during his press conference following the central bank's 50-basis-point rate hike.
Peter Schiff: Fed's 'inflation fire' will burn hotter in 2023
Euro Pacific Capital chief global economist Peter Schiff and NatAlliance Securities global fixed income head Andy Brenner react to Jerome Powell's news conference after interest rates were raised by 50 basis points on 'The Claman Countdown.'
Bank of America strategists Michael Gapen, Mark Cabana and John Shin collectively predict a recession next year.
"We agree and continue to look for a recession in 1H 2023 and a sharper rise in the unemployment rate than the median FOMC member projects," they wrote. Currently, the Fed expects the unemployment rate to reach 4.6% next year, up from November's 3.7%.