© Reuters
By Geoffrey Smith
Investing.com — U.S. stock markets opened lower again on Wednesday, extending the losses that they posted on Tuesday in response to warning words from Lael Brainard and other high-ranking Federal Reserve officials.
By 9:40 AM ET (1340 GMT), the was down 282 points, or 0.8%, at 34,360 points. The was down 1,1% and the was underperforming with a loss of 1.7%.
The moves came as benchmark interest rates rose to a new high for the year of 2.64%, having lurched higher on Tuesday when Brainard, nominated as the Fed’s new vice-chai, said that the Fed could start selling bonds out of its portfolio as early as May, at a faster pace than previously envisaged.
Brainard’s comments were echoed later by Kansas City Fed President Esther George and San Francisco president Mary Daly. They led analysts from Deutsche Bank (DE:) to conclude that there is now a high risk of the U.S. economy going into a recession in 2023 as the Fed is forced to raise interest rates above their neutral level in order to bring inflation down.
Long-term interest rates were in focus with the day’s earlier economic data, as the Mortgage Brokers Association said its reference had risen another 10 basis points last week to 4.90%, its highest since early 2019. Recent data have shown Increasing mortgage finally starting to have an the housing market.
Early selling was broad-based, with money flowing out of megacaps such as Nvidia (NASDAQ:), Tesla (NASDAQ:) and the FAAMG group. Apple (NASDAQ:) stock, Amazon (NASDAQ:) stock and Meta Systems stock all lost over 2%, while Nvidia stock lost 4.0% and Tesla stock 3.6%.
Be the first to comment