You are here: Home » Markets » News
Business Standard

Wall Street falls 2% following remarks by Fed chairman Jerome Powell

The Dow Jones Industrial Average fell 565.49 points, or 2.31%, to 23,939.73, the S&P 500 lost 53.08 points, or 1.99%, to 2,609.76 and the Nasdaq Composite dropped 134.34 points, or 1.9%, to 6,942.21

Caroline Valetkevitch | Reuters  |  New York 

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Photo: Reuters

extended losses and the 500 hit a session low in Friday afternoon trading after Federal Reserve said the US central will likely need to keep raising interest rates to keep inflation under control.

In a speech in on the US economic outlook, Powell said the labour market appeared close to full employment. It was his first speech on the economic outlook since taking over as on Feb. 5.

Stocks already were sharply lower before the comments following US Donald Trump's latest threat late Thursday on Chinese imports, which revived fears of a trade war between the two countries.

"The market wouldn't be acting nearly as negative to all the in general if it would not be in a vulnerable state already," said Jim Paulsen, at in

"It's got higher values, financial liquidity is contracting, you came into the year with a little too much optimism, you got rising rates going on, you got rising inflation fears," he said.

Trump threatened to slap $100 billion more in tariffs on Chinese imports, while said it was fully prepared to respond with a "fierce counter strike".

All main indexes were down sharply, but industrials, financials, and materials sectors led the declines, with industrials down 2.7%.

The Industrial Average fell 565.49 points, or 2.31%, to 23,939.73, the lost 53.08 points, or 1.99%, to 2,609.76 and the dropped 134.34 points, or 1.9%, to 6,942.21.

Fears of a trade war since Trump announced tariffs on and aluminium imports more than a month ago have kept investors on edge over concerns that such protectionist measures would hit global economic growth.

"It's a reaction to concerns about the administration's approach to trade. The market has vacillated between writing it off as just talk and assuming there could be a serious problem," said Rick Meckler, of investment firm in Jersey City,

Before the session started, a Labor Department report showed nonfarm payrolls increased by a smaller-than-expected 103,000 last month. While annual growth in average hourly earnings rose to 2.7%, it stayed below the 3% that economists estimate is needed to lift inflation toward the Federal Reserve's 2% target.

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, April 07 2018. 00:37 IST
RECOMMENDED FOR YOU