decline n Wall Street

Tech Stocks Hit in Wall Street Decline After Fed Announcement

Wall Street experienced a decline Thursday as the Federal Reserve opted to maintain current interest rates, sending a hawkish signal to investors, hinting at a potentially prolonged period of elevated rates. The S&P 500 witnessed a 1.6% drop, the Dow Jones Industrial Average declined by 1%, and the Nasdaq Composite, known for its tech-heavy components, saw a significant 1.8% decrease, leading the market declines.


After scrutinizing the Federal Reserve’s projections, investors observed a suggestion of a protracted “higher for longer” stance, triggering speculation regarding the duration of these elevated rates. Notably, Goldman Sachs revised its forecast for a Federal Reserve rate cut, now projecting it to materialize in the fourth quarter of 2024.


Upon receiving news of an extended period of higher interest rates, some investors reacted with panic, exerting pressure on both stocks and bonds. Consequently, the yield on the 10-year Treasury surged to its highest level in over 15 years. However, Federal Reserve Chair Jerome Powell emphasized that policy decisions would hinge on economic data. This stance found support in the release of official figures on Thursday, which revealed that jobless claims had plummeted to their lowest point since January.


In parallel, the Bank of England opted to maintain interest rates at their current level, signaling a pause in potential tightening measures. Across Europe, there were some surprises in central bank decisions. The Swiss National Bank chose to leave rates unchanged, while Norway hinted at the possibility of another hike in December.


Within the individual stock market arena, FedEx emerged as a bright spot following its report of a quarterly profit that exceeded expectations. Overall, the Federal Reserve’s decision to maintain steady interest rates triggered a decline in stocks on Wall Street, specially on tech-related stocks, as concerns loom on the implications of an extended period of heightened interest rates. The extent to which upcoming economic data might assuage these concerns remains uncertain.

Source: Yahoo Finance

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