Nasdaq Composite books worst day in 11 weeks as stock market slumps amid ‘hawkish’ central banks – MarketWatch

Nasdaq Composite books worst day in 11 weeks as stock market slumps amid ‘hawkish’ central banks – MarketWatch

U.S. stocks ended lower Thursday, with big tech shares leading the way lower, as investors waded through a raft of economic data and weighed monetary policy moves by global central banks following the Federal Reserve’s decision a day earlier to more quickly wind down its asset purchases and pencil in three interest rate increases for 2022.

What’s happening
  • The Dow Jones Industrial Average
    DJIA,
    -0.08%
    declined 29.79 points, or 0.1%, to finish at 35,897.64.

  • The S&P 500
    SPX,
    -0.87%
    fell 41.18 points, or 0.9%, to end at 4,668.67.

  • The Nasdaq Composite Index
    COMP,
    -2.47%
    slumped 385.15 points, or 2.5%, to close at 15,180.43 — marking the biggest one-day point and percentage loss since Sept. 28.

On Wednesday, stocks rose sharply across the board.

What’s driving markets

Tech- and other growth-oriented sectors fell sharply. Apple Inc.
AAPL,
-3.93%
fell 3.9%, while Amaon.com Inc.
AMZN,
-2.56%
shed 2.6% and Microsoft Corp.
MSFT,
-2.91%
dropped 2.9%.

“The growth outlook still remains upbeat for next year and that some traders rotating back into cyclicals,” said Edward Moya, analyst at Oanda, in a note.

Central banks remained in the frame on Wall Street, a day after the Federal Reserve adopted a hawkish stance in its forecasts for interest-rate hikes in 2022 and 2023 while also more aggressively slowing the pace of its bond buying.

The Bank of England on Thursday made a surprising decision, becoming the first major central bank to lift interest rates since pandemic began by raising its benchmark to 0.25% from 0.10%. The U.K. government’s worries about the economic impact of the omicron variant of coronavirus, as well as central bank policy makers’ speeches ahead of time, had led traders to expect the BOE would refrain from raising rates in December.

Meanwhile, the European Central Bank, also on Thursday, said it would further slow purchases of assets under its Pandemic Emergency Purchase Program, or PEPP, in the first quarter of next year and bring them to a halt in March. But the ECB softened the blow by planning to raise purchases under a separate, existing program in the second quarter, while ECB President Christine Lagarde reiterated that a rate increase in 2022 remained unlikely.

Read: ECB to end emergency pandemic asset buys in March, while Bank of England delivers ‘Super Thursday’ surprise

U.S. stocks opened with gains, seeing the S&P 500 briefly trade above its record close from Dec. 10, but the tech-heavy Nasdaq and the S&P 500 soon turned negative and deepened those declines as the session progressed.

“Interest rates pulled back despite the Fed not only confirming the rapid tapering of QE but also laying out the likelihood of three rate increases in 2022 and three more in 2023, where they hope to see the fed-funds rate equal to …….

Source: https://www.marketwatch.com/story/time-for-the-santa-rally-u-s-stock-market-futures-extend-post-fed-swing-higher-11639650611

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