Stocks Fall more than 700 points as Recession fears Grows

BUSINESS

Investors were considering the European Central Bank and Federal Reserve rate hikes when the US stock market experienced a sharp decline on December 15, 2022. During the session, it appeared that the market was aware that the US central bank would continue to be hawkish well into the coming year.

The S&P 500 has lost 2.5 percent, the Nasdaq Composite has lost 3.2 percent, and the Dow Jones Industrial Average has lost 764.13 points, or 2.3 percent. The strategy setting board of the Central bank projected that it will keep expanding rates to in excess of 5% in 2023.

Investors have sold stocks as they prepare for the possibility that high rates could set off a recession in the United States after a mutated response to the Federal Reserve’s decision. The European Central Bank and the Bank of England each increased interest rates by 50 basis points.

According to Melissa Brown, the global head of applied research at Qontigo in New York, this is not only what they did but also what they said. It does not appear that they are still concerned about inflation, and this is not the end of the rate increases.

See also  Intel to Construct Chip Factory worth $20-Billion in Ohio

Melissa Brown added that until they start focusing on more data, it is difficult to determine what will bring things back to normal. Presently, participants in the money market anticipate two rate increases of at least 25 basis points in 2023, bringing borrowing costs to a peak of 4.9% in the first half of the year.