Stocks Ended the Week Lower Following Wednesday’s Fed Rate Hike…..
U.S. equities tumbled, with the Dow hitting its lowest level of the year earlier today, as several central banks across the globe persisted in aggressively tightening monetary policy this week. Investors continued to digest Wednesday’s third-straight 75-basis point rate hike from the Fed, as well as rate increases from the Bank of England and Swiss National Bank. The markets also contended with a host of manufacturing and services PMIs globally, with activity in the Eurozone hitting a 27-month low, while U.S. activity unexpectedly increased. News on the equity front was light, as shares of Costco Wholesale declined after its better-than-expected earnings were overshadowed by a decline in gross margins. Treasury yields were mixed, and the U.S. dollar rallied to fresh multi-decade highs. On the other hand, Crude oil and gold prices tumbled. Asia finished broadly lower, and Europe saw widespread losses, with the recent monetary policy actions across the globe continuing to weigh on sentiment.
The Dow Jones Industrial Average decreased 486 points (1.6%) to 29,590, the S&P 500 Index fell 65 points (1.7%) to 3,693, and the Nasdaq Composite went down 199 points (1.8%) to 10,868. In moderate volume, 5.1 billion shares of NYSE-listed stocks were traded, and 5.1 billion shares also changed hands on the Nasdaq. WTI crude oil lost $4.75 to $78.74 per barrel. Elsewhere, the gold spot price declined $30.20 to $1,650.90 per ounce, and the Dollar Index rallied 1.7% to 113.01. Markets ended noticeably lower for the week, as the DJIA fell 4.0%, the S&P 500 dropped 4.7%, and the Nasdaq Composite tumbled 5.1%.
The preliminary S&P Global U.S. Manufacturing PMI Index for September unexpectedly increased to 51.8 from August’s unrevised 51.5 figure, and versus estimates of a slight decrease to 51.1. The preliminary S&P Global U.S. Services PMI Index also surprised to the upside, as the key U.S. sector in September rose to 49.2, compared to expectations of a modest gain to 45.0 from August’s 43.7 figure. The manufacturing PMI moved further into expansion territory, while the services PMI remained in contraction territory, with 50 being the demarcation point between the two zones.
Treasury yields were mixed, as the yield on the 2-year note rose 7 basis points (bps) to 4.20%, the yield on the 10-year note ticked 1 bp lower to 3.69%, and the 30-year bond rate declined 3 bps to 3.61%.
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