US stocks in multi-week loss, Nasdaq down since financial crisis – ThePrint

0

New York [US]Jan 22 (ANI/Sputnik): U.S. stocks were heading for their worst month since the 2008 financial crisis as Wall Street reels in a weeks-long loss sparked by fears of a series of interest rate hikes. interest in suppressing inflation.

The tech-heavy Nasdaq index, the darling of investors after the coronavirus outbreak confined Americans to their homes and relied on video streaming and gadgets for work, is down 11% since January. That’s more than the 10% loss it suffered in March 2020 at the start of the COVID-19 pandemic and the highest since October 2008 when the financial crisis erupted.

The S&P 500 index, which represents the top 500 U.S. stocks, is down 8% in January from its previous biggest monthly loss of nearly 13% in March 2020.

The Dow Jones Industrial Average, which represents U.S. industrial stocks, fell 6% in January, its highest level since falling 14% in March 2020.

“Wall Street has gone from debating aggressiveness to moving from technology to cyclicals, to selling everything,” said Ed Moya, analyst at online trading platform OANDA. “Investors have two big worries: it seems like traders are being reminded every day that inflationary pressures aren’t going away anytime soon and could cause the Fed to get too aggressive in tightening monetary policy.”

Moya said the other concern investors have is that earnings growth expectations may have been overly optimistic and understated given soaring labor costs. Geopolitical risks are also fueling selling pressure, he added.

The Federal Reserve cut U.S. interest rates to near zero after the COVID-19 crisis hit, and has kept them there ever since to help the recovery.

As a result, the US consumer price index rose 7% in the year to December, rising at its fastest pace since 1982, after billions of dollars in relief spending by the government, higher wage payments by companies, and supply chain disruptions caused by the pandemic. The Federal Reserve is now saying it may have to execute a series of interest rate hikes to counter such inflation. (ANI/Sputnik)

This story is automatically generated from a syndicated feed. ThePrint declines all responsibility for its content.

Share.

Comments are closed.