US stocks sink as investors worry Fed hike could derail growth

US stocks fell on Thursday morning after higher US inflation expectations higher rate hike That investors’ concerns will cool economic growth.

Wall Street’s benchmark S&P 500 index was down 67 points, or 1.8%, at 3,734 as of 10:50 on Thursday morning. The Dow fell 566 points, or 1.8%, to 30,206 and the tech-heavy Nasdaq fell 1.5%.

Investors worry about aggressive action by the Fed and other central banks to pacify inflation at a four-decade high that could derail global growth.

Stephen Innes, of SPI Asset Management, said in a report, “Growth fears are hitting the markets harder than inflation concerns.”

The S&P 500 lost 0.4 percent on Wednesday. The Dow fell 0.7% and the Nasdaq Composite 0.2%.

Traders expect another Fed rate hike this month, perhaps matching last month’s 0.75 percent increase, the biggest in 28 years and more than three times the normal margin.

Bank stocks also fell on reports of weak earnings. JPMorgan Chase’s profits fell 28% in the second quarter, the bank reported Thursday, as it tries to navigate an economy that is showing strength in many sectors but steamrolled amid rising interest rates. that affects consumers and businesses alike.

Bank stocks have taken heavy losses this year as investors worry about the Federal Reserve pouring out the US economy in recession To counter inflation. A recession would mean some Americans would lose jobs, and possibly start falling behind on their debts. These fears have more than offset the higher revenue earned by banks from higher interest rates.

Fed officials say a recession is possible but not certain. they point to a strong US job market Despite the high borrowing cost.

Taking a more critical stance, CEO Jamie Dimon said in a statement that while the US economy is growing and the job market and consumer spending are solid, a number of factors “are likely to have sometimes negative consequences on the global economy. Confidence waning and the Federal Reserve’s efforts to bring decades of high inflation under control.

Fed rate hike forced home buyers out of the market


“US consumers are almost the only ones saving the global economy,” Andrew Hunter, senior US economist at Capital Economics, said in a research note in June. Recent consumer spending data There are suggestions that consumers have started cutting back on their spending on goods and services. Experts said this could be the first indication that inflation could be very high.

Traders are looking forward to the latest quarterly results from major US companies in the coming weeks.

In energy markets, benchmark US crude fell $1.26 to $95.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to $96.30 on Wednesday. Brent crude, the price base for international oil trade, fell $1.06 to $98.51 a barrel in London. It rose 8 cents to $99.57 a barrel in the previous session.

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