Stock market news live updates: Nasdaq sheds 2.5%, weighed down by broader tech sell-off – Yahoo Finance

December 16, 2021 by No Comments

The Nasdaq fell hard on Thursday, dragged down by a sell-off in big-name tech stocks poised to suffer from the Fed’s hawkish shift on potential interest rate hikes in 2022.

All three major U.S. indexes closed in the red as investors mulled the likelihood of rising rates, paring gains from a relief rally staged yesterday after the central bank announced a ramp up of its taper that could end the pandemic-era stimulus program completely by March. The Dow was mostly flat after a choppy trading day, while the S&P edged lower. The Nasdaq shed 2.47%.

Apple (AAPL) saw its worst day since March, falling more than 4% during intraday trading. The stock closed at $172.26 a piece, down by 3.93%. Shares of Amazon (AMZ), Netflix (NFLX), and Tesla (TSLA) also declined in a broader sell-off of the largest publicly-traded companies in the world.

First-time unemployment filings totaled 206,000 up from last week’s half-century low but down overall from the highs of their pandemic peak, reflecting labor market tightness brought on by a lingering shortage of workers. Housing starts rose 11.8% on a month-over-month basis in November, and activity in the U.S. services and manufacturing sectors decelerated in early December but still held in expansionary territory

Meanwhile, President Joe Biden signed a bill that averted the U.S. government from defaulting. The bill raised the U.S. debt limit to $31.4 trillion from $2.5 billion.

On Wednesday, Fed officials outlined plans to accelerate the wind down of monthly bond purchases and signaled plans to raise interest rates three times next year in a noticeable adjustment from September projections that reflected a 50-50 split on a rate hike in 2022.

“Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to elevated levels of inflation,” the FOMC said in its statement. The committee also noted that Omicron and other new variants of COVID-19 remain risks to the economic outlook.

“The market has been pretty sanguine about the whole thing,” Charles Schwab chief fixed income strategist Kathy Jones told Yahoo Finance Live. “The market is not sure that the Fed will actually be able to raise rates as much as they say.”

The Fed’s so-called “dot plot,” a summary of individual members’ outlooks for economic conditions and interest rates, showed the median number of FOMC members expected three rate hikes in 2022, up to four in 2023 and two projected for 2024, reflecting a faster pace for rate increases than anticipated in September’s forecast.

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