US: Stocks tumble as Fed Chair says more rate hikes possible
WALL Street stocks slumped on Thursday as Federal Reserve Chair Jerome Powell said the US central bank is prepared to hike interest rates further if needed to lower inflation.
The Dow Jones Industrial Average dropped 0.7 per cent to 33,891.94, while the S&P 500 Index plunged 0.8 per cent to 4,347.35.
The Nasdaq Composite Index tumbled 0.9 per cent to 13,521.45.
The drop came after Powell told a conference in Washington that progress towards policymakers’ two per cent goal is “not assured.”
This month, officials decided to hold interest rates at a 22-year high for a second straight meeting, fueling hopes that the Fed was done with rate hikes.
But Powell said on Thursday: “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”
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Powell’s remarks were of a “different tone than he has given before,” said Karl Haeling of LBBW.
“Maybe he shifted the emphasis of his views and talked more about the risks simply because with the drop in bonds yields, and the rally in stocks... you saw an easing of financial conditions,” Haeling added.
Among individual companies, Disney shares rallied nearly seven per cent after reporting its profits exceeded expectations.
Arm shares dropped 5.2 per cent after releasing its earnings report. AFP
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