The major U.S. benchmarks are erasing gains made earlier in the week as key blue-chip stocks pull the Dow down, extending its year-to-date deficit. The index tracking 30 large, publicly-owned companies fell as much as 800 points to an intraday low of 32,573.43 around 1:30 p.m. Eastern time before recovering some losses.
An hour before the market close, the S&P and Nasdaq are also down, slipping approximately 2% and 2.8% into the red, while Dow components Boeing, Coca-Cola, and American Express prepare for losses on Thursday to drag the blue-chip Dow even lower in 2022.
Dow Jones Industrial Average
. Ticker Security Last Change Change % I:DJI DOW JONES AVERAGES 33027.49 -348.99 -1.05%
In an interview with FOX Business, Edward Moya, a senior market analyst for OANDA in New York said, "It looks like the Grinch is here to stay."
"Investors are nervous that we have yet to see the true impact of global central bank tightening, and they will remain overly defensive and shy away from interest-rate sensitive sectors," he explained. "Boring stocks with nice dividend returns will start to look attractive again, while some investors will give fixed income a good look as yields become more attractive than investing in some of the major indexes."
Investors eye central banks around the world
Federal Reserve Chairman Jerome Powell attends a news conference following an Open Market Committee meeting, at the Federal Reserve Board Building, Wednesday, June 15, 2022, in Washington. (AP Photo/Jacquelyn Martin)
Central banks in the U.K., eurozone, and Switzerland have all increased interest rates by 0.5 percentage points, following the Federal Reserve’s continued strategy of scheduled interest rate hikes, leaving many investors on the sidelines until an end to the rate hikes is announced.
Last week, the U.S. Federal Reserve remained committed to its interest rate hike strategy, moving the fed funds rate 50-basis points higher to cool inflationary pressures not seen in more than four decades. Many observers expect the Fed’s policy moves to send the U.S. economy into a recession.
Piper Sandler Chief Investment Strategist Michael Kantrowitz shares his market predictions for 2023 and discusses the upcoming final read of the 3rd quarter GDP.