US: Stocks end mostly lower on Fed rate hike concerns

US stocks slipped for a second consecutive day, ending mostly lower on concerns the Federal Reserve could trigger a US recession, as more central bankers said interest rates have to rise further to contain inflation.

The Dow Jones Industrial Average was essentially flat, closing at 33,546.32, but the broad-based S&P 500 slipped 0.3 per cent to 3,946.56, while the tech-rich Nasdaq Composite Index fell 0.4 per cent to finish at 11,144.96.

Investors also were digesting mixed quarterly results, with Cisco Systems shares jumping around five per cent after earnings exceeded expectations, but others like chip company Nvidia struggling amid ongoing issues facing the semiconductor industry.

Meanwhile, St Louis Fed president James Bullard was the latest in a string of central bankers saying more rate hikes will be needed because the benchmark lending rate is not yet “sufficiently restrictive”.

The Fed has moved aggressively to douse red-hot inflation, raising the benchmark lending rate six times this year to cool demand.

Kansas City Fed president Esther George on Wednesday (Nov 16) cautioned that it is unclear how policymakers can tamp down inflation “without having some real slowing, and maybe we even have contraction in the economy”.

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Art Hogan of B Riley Wealth Management said Bullard’s comments triggered “some nervousness in the market this morning”.

But markets settled slightly around midday, as investors shifted their focus to companies with “better earnings”, including Cisco, he said. AFP