US: Dow at lowest level since Nov 2020 as stocks rout worsens

WALL Street stocks finished decisively lower Friday (Sep 23), falling for the fourth straight session as markets bet on the rising risk of a recession due to interest rate hikes.

All 3 major indices dropped more than 1.5 per cent, adding to the week’s losses after Wednesday’s big Federal Reserve rate increase spurred similar moves by other central banks in response to elevated inflation.

“What looks like the proverbial ‘sell now and ask questions later’ downdraft in today’s market is just that: raise cash as uncertainty and volatility climbs,” said Quincy Krosby of LPL Financial.

“Credit markets globally, along with currency and equity markets are not certain that central banks will be able to restore price stability as easily as their rhetoric suggests.”

The Dow Jones Industrial Average tumbled 1.6 per cent to 29,590.41, its lowest closing value since November 2020.

The broad-based S&P 500 fell 1.7 per cent to 3,693.23, while the tech-rich Nasdaq Composite Index sank 1.8 per cent to 10,867.93.

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The drop came after the Federal Reserve Wednesday enacted a third straight interest rate increase of 0.75 percentage point as Fed Chair Jerome Powell warned that countering inflation could not be “painless.”

That move was followed Thursday by rate hikes from the Bank of England among other central banks, boosting the odds of a global recession. AFP