Tuesday, July 27, 2021
Home Business Wall Street ends sharply lower after hawkish Bullard spooks investors By Reuters

Wall Street ends sharply lower after hawkish Bullard spooks investors By Reuters


© Reuters. FILE PHOTO: A street sign is seen in front of the New York Stock Exchange on Wall Street in New York, February 10, 2009. REUTERS/Eric Thayer/File Photo

By David French and Medha Singh

(Reuters) – The three main Wall Street indexes all finished sharply lower on Friday, after investors were spooked by hawkish interest rate comments by Federal Reserve official James Bullard.

The blue-chip Dow and the benchmark , which started the week at record closing levels, slumped after Bullard, president of the St. Louis Federal Reserve, said he was among the seven officials who saw rate increases beginning next year to contain inflation.

Inflation, and how the U.S. central bank will tackle it as the country comes out of the pandemic, had been front-and-center of investors’ minds in the run-up to this week’s Fed policy meeting.

Therefore, since the Fed on Wednesday projected interest rate hikes would happen sooner than previously expected, and signaled it was reaching the point where it could begin talking about tapering its massive stimulus – as opposed to just thinking about it – Wall Street’s main indexes have struggled.

“I’m not surprised to see the market sell off a little bit. I’m never surprised, given the strong run we’ve had for such a long period of time, when you see some periods of profit-taking,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Bullard’s comments spiked the CBOE volatility index, Wall Street’s fear gauge, which initially hit its highest level since May 21, before dropping back a touch.

“Next week, you will have various Fed governors give speeches, and we’ll have the same thing: some governors will be more hawkish, and some will be more dovish, so you’ll see some back-and-forth,” Ghriskey added.

Unofficially, the fell 534.22 points, or 1.58%, to 33,289.23, the S&P 500 lost 56.07 points, or 1.33%, to 4,165.79 and the dropped 131.66 points, or 0.93%, to 14,029.69.

Other market ramifications from Bullard’s comments have included further strengthening of the U.S. dollar. The index which tracks the greenback against six major currencies jumped to its highest level since mid-April, and is on pace for its largest weekly gain in about 14 months.

While prices – which traditionally suffer from a strong dollar – initially fell on Friday, they rebounded after OPEC sources said the producer group expected limited U.S. oil output growth this year. [O/R]

The upward commodity move didn’t translate into positive sentiment for U.S. energy stocks, with the sector’s index joining financials as the worst performers.

Friday was also “quadruple witching day,” the quarterly simultaneous expiration of U.S. options and futures contracts which bring about increased trading volume at the market close.

It was the largest options expiration in history, noted Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:).





Source link

RELATED ARTICLES

Master These Rummy Strategies to Skill up The Game Today

Rummy, the most revered card game in the world after Poker, is a show of sharp mind and swift move. The idea of the...

Tesla (TSLA) earnings Q2 2021

Tesla reported earnings after the bell Monday, and it's a beat on both top and bottom lines. Shares rose about 1% after hours. Here...

9 Myths Behind Brain Tumor Surgery

Brain tumors can happen to people of any age group. Moreover, brain tumor surgery varies from person to person depending on the size and...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Master These Rummy Strategies to Skill up The Game Today

Rummy, the most revered card game in the world after Poker, is a show of sharp mind and swift move. The idea of the...

Tesla (TSLA) earnings Q2 2021

Tesla reported earnings after the bell Monday, and it's a beat on both top and bottom lines. Shares rose about 1% after hours. Here...

9 Myths Behind Brain Tumor Surgery

Brain tumors can happen to people of any age group. Moreover, brain tumor surgery varies from person to person depending on the size and...

Lok Sabha passes Factoring Regulation (Amendment) Bill; to help expedite MSME payments

Over 83k delayed payment applications have been filed by micro and small enterprises, as of July 26, 2021, as per MSME Samadhaan portal.Credit...

Recent Comments