NEW YORK: Wall Street stocks fell early Thursday after the Bank of England followed the US Federal Reserve in enacting a big interest rate hike to combat inflation.
The BoE said it was lifting borrowing costs by 0.75 percentage points to three percent in its biggest rate hike since 1989.
The move came after the Fed on Wednesday also enacted a rate hike of the same size as Chair Jerome Powell pledged continued action to combat inflation at a news conference that market watchers viewed as hawkish.
“The message from Fed Chair Powell yesterday was a downer for the stock market,” said Briefing.com analyst Patrick O’Hare.
“Mr. Powell said a lot, but the point that registered was his view that it is very premature to talk about pausing the rate hikes and that the Fed still has a ways to go to get the policy rate to a restrictive level” to bring inflation lower.
Stocks mostly up, dollar drops vs yen, yields fall following Fed decision
About 15 minutes into trading, the Dow Jones Industrial Average was down 0.7 percent at 31,919.59.
The broad-based S&P 500 shed 1.2 percent to 3,716.21, while the tech-rich Nasdaq Composite Index dropped 1.4 percent to 10,379.84.
Among individual companies, eBay shot up 7.1 percent as it reported better-than-expected results “in the face of a challenging macroeconomic environment.”
But Kellogg fell 4.6 percent despite raising its full-year forecast as it pointed to strong sales in snacks globally and a “continued rebound” in North America cereal.
Comments
Comments are closed.