NEW YORK: Wall Street stocks retreated on Thursday (Nov 3) as markets awaited key US jobs data, while taking in hawkish moves by major central banks.
The latest decline came a day after the US Federal Reserve (Fed) announced another sharp interest rate increase and said it was premature to think about pausing, which was followed shortly by a similar big move by Bank of England as part of the fight against inflation.
After Wednesday’s announcement, Fed chair Jerome Powell pledged continue to combat inflation with further rate increases during a press briefing seen as hawkish by market watchers.
“He was just trying essentially to beat the market down with a stick,” Jack Ablin of Cresset Capital said of Powell’s remarks.
Investors will be watching the US employment report due out today (Nov 4) for any signs of cooling in the economy, while inflation figures due next week will be “a wild card”, Ablin added.
The Dow Jones Industrial Average fell 146.51 points, or 0.46%, to 32,001.25, the S&P 500 lost 39.8 points, or 1.06%, to 3,719.89 and the Nasdaq Composite dropped 181.86 points, or 1.73%, to 10,342.94.
“Years ago the Fed’s job was to take away the punch bowl and that balance is always a very difficult transition, you want the economy to slow to keep inflation from getting out of hand but you want enough earnings to support stock prices,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“It is about the rate of change as much as the change so when the rate of change starts to slow … that almost becomes a positive even though in absolute terms we are going to continue to see higher rates, and higher rates means more competition for stocks and lower multiples.”
Among individual companies, chipmaker Qualcomm plunged 7.7% as it lowered its forecast for smartphone sales. The outlook weighed on smartphone giant Apple, which fell 4.2%.
Among other companies reporting results, eBay rose 2.0% while Marriott International dropped 4.3%. – AFP, Reuters