Sellers continue to pound US markets to continue Wednesday’s sell-off. In the previous session, the Dow lost 2.25% for its worse daily performance since September. The S&P 500 and NASDAQ Composite fell 2.49% and 3.23%, respectively.
Two catalysts worrying investors
Stocks began to weaken late Wednesday on the back of the US Federal Reserve’s 50 basis point rate hike to a target range of 4.25% and 4.5% – the highest rate in 15 years. The central bank said it would hike rates further to 5.1% by 2023, a higher number than previously expected.
Selling pressure accelerated on Thursday after the US released disappointing retail sales numbers. According to the report, inflation is hitting consumers harder than expected. This showed consumers that spending is slowing, a sign that the economy is weakening.
Consumer spending main concern
Investors have an opportunity to act on earnings data ahead of Friday’s opening bell. Findings from Darden Restaurants, Olive Garden’s parent company, may provide better insight into consumer spending patterns.
Fed speakers could set the tone
Several Federal Reserve speakers will speak during Friday’s session. Investors will try to gauge the pace of future rate hikes and the central bank’s view of the economy from statements by Fed spokesmen John Williams, Michelle Bowman and Mary Daily. Her comments could add selling pressure or calm the bears enough to book gains and stabilize prices.
More data on terms and conditions
Data will also be released on Friday with the December Services and Manufacturing PMIs. The indices are viewed as a gauge of business conditions. Traders expect manufacturing to arrive at the same rate as November, while services prices are expected to show a 0.3-point increase, CNBC wrote.
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