Stock market news live updates: Stocks plunge as rate hikes rattle markets, retail sales miss – Yahoo Finance
U.S. stocks tumbled Thursday as Wall Street reeled from another sizable rate hike by Federal Reserve officials and assessed similar moves by monetary policymakers across the Atlantic. A disappointing reading on consumer spending also weighed on sentiment.
The European Central Bank and the Bank of England followed the U.S. Fed in raising interest rates by 50 basis points Thursday morning. The BoE’s hike brought rates in the country to their highest since 2008.
The S&P 500 (^GSPC) slid 2.7% in midday trading, while the Dow Jones Industrial Average (^DJI) shed more than 850 points, or 2.6%. The technology-heavy Nasdaq Composite (^IXIC) dropped more than 3%.
U.S. Treasury yields edged down, with the benchmark 10-year note falling below 3.5%. The U.S. dollar index nudged higher, and oil prices retreated, with West Texes Intermediate (WTI) crude futures trading around $76 per barrel.
European Central Bank President Christine Lagarde also echoed a hawkish tune from Fed Chair Jerome Powell following the monetary authority’s rate decision.
“Anybody who thinks that this is a pivot for the ECB is wrong,” Lagarde said in a news conference. “We should expect to raise interest rates at a 50 basis-point pace for a period of time.”
“We have more ground to cover, we have longer to go and we are in for a long game,” she said.
Meanwhile, the government’s retail sales report showed spending fell sharply in November as the key holiday shopping season kicked off. The latest retail sales reading showed a decline of 0.6% over the prior month but a 6.5% increase from the same period last year.
“Black Friday and holiday shopping weren’t enough to save retail sales last month as they decreased the most this year and came in well below expectations,” Morgan Stanley’s Head of Model Portfolio Construction Mike Loewengart said in a note.
“The consumer has been resilient amid hot inflation and rising rates, but high prices and talks of a recession may have some now second guessing reaching for their wallet,” he added. “It’s been a busy week for investors with both the Fed and ECB raising rates, so it shouldn’t be a surprise to see a shaky market.”
While a slowdown in retail spending showed sings of economic weakness, another economic release out early Thursday underscored continued tightness in the labor market. Filings for unemployment insurance fell unexpectedly last week to the lowest since September. Initial jobless claims, the most timely snapshot of the U.S. employment situation, came in at 211,000 for the week ended Dec. 10, a decrease of 11,000 …….