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US stocks plunge after another rate hike by the Federal Reserve, while hikes in other nations followed – Powell signals more hikes coming – Jobless claims fall – Elon Musk sells 22 million Tesla shares
At Wednesday’s meeting, the Federal Reserve raised short-term interest rates by 0.50%, bringing the benchmark interest rates to their highest level since 2007. Wednesday’s rate increase brings short-term interest rates to a range of 4.25%-4.5%, Yahoo reported.
The Fed’s move sent stocks tumbling on Thursday. The S&P 500 slipped 1.4%, the Dow Jones Industrial Average slipped around 380 points, or 1.1%, while the technology-heavy Nasdaq Composite skidded 1.7%, Yahoo reported.
The benchmark 10-year Treasury yield fell below 3.5% on Thursday after weaker-than-expected retail sales, CNBC reported. The 2-year yield was also lower by 2 basis points at 4.27%.
The euro rose from a 0.5% loss against the dollar to a 0.4% gain following the announcement, while European equities in the Stoxx 600 index plunged 2.4%, CNBC reported.
Wednesday’s 50 basis point rate hike marked a slowdown from the Fed’s recent pace of four consecutive rate hikes of 75 basis points – its most aggressive stretch since the 1980s.
On Wednesday, Powell indicated that rate increases from the Federal Reserve are likely to continue.
“We still have some ways to go,” Powell said at a press conference after the Federal Open Market Committee raised its benchmark rate by 50 basis points to a 4.25% to 4.5% target range, Yahoo Finance reported. “I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way.”
“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell added.
For the week ending December 10, the number of first-time jobless claims fell to 211,000, a drop of 20,000 from the previous week and the lowest level since December, according to data released on Thursday by the Department of Labor, CNN reported.
Continuing claims – the number of people collecting unemployment benefits on an ongoing basis – was up slightly from the previous week to 1.671 million, data from the Labor Department showed.
The European Central Bank (ECB) raised interest rates by 50 basis points, taking its key rate from 1.5% to 2% on Thursday, its fourth increase this year, CNBC reported.
The Bank of England also raised interest rates by 50 basis points.
The Swiss National Bank also raised its interest rate by 50 basis points to counter “increased inflationary pressure and a further spread of inflation,” CNBC reported. It was the third consecutive hike in 2022 after moving rates out of negative territory in September.
On Monday through Wednesday this week, Tesla CEO
Elon Musk sold another 22 million shares, raising $3.6 billion, according to a disclosure in an SEC filing late Wednesday, CNN reported. Musk did not disclose the reason for the sales in the filing.
Tesla shares are down about 20% in December so far and roughly 55% year-to-date, Yahoo reported.
