Wall Street records worst day of 2023 so far
Wall Street has marked the worst performance with its main benchmarks of this year so far on Tuesday, as investors explained a U.S. business activity rebound in February, which means that interest rates will need to stay high to control inflation.
Both S&P 500 and NASDAQ witnessed a decline for three sessions in a row, the Dow Jones Industrial decline was drastic to the extent that it wiped out its gains so far this year.
Wall Street fall came as a result of S&P Global buying Manufacturer’s index, which demonstrates activity in the American business is expanding for the first time in eight months, according to Reuters.
The American economy right now is described by Reuters as a resilient economy, in which the Central Bank is working continuously to stop a backdrop and to help control the inflation.
Fed’s 2 percent inflation target is still out of reach and money market participants have been witnessing an incline in the Fed fund rates to reach 5.35 percent in July, with an effort to stay somewhere near this level till the end of the year.
The U.S. stock market has had an optimistic start this year, after its worst annual showing in a decade last year, which lead investors to hope that the hike in the Central Bank’s interest rates would finally come to an end.
“The market keeps looking for a dovish pivot, and they are just not going to get it,” said Carol Schleif the chief investment officer at BMO Family Office.
The Fed’s discussion minutes due out on Wednesday should give more clues to the Central Bank’s plans on rates.
The Dow Jones Industrial Average (.DJI) declined by 2.06 percent, to close at 33,129.59, the S&P 500 (.SPX) also declined by or 2.00 percent closing at 3,997.34 while the Nasdaq Composite dropped 294.97 points, or 2.5 percent, to reach 11,492.30.
Other indices that were affected in the Wall Street declines were for companies such as Tesla Inc., Amazon.com Inc., Microsoft Corp, and Google-parent Alphabet Inc. all falling with percentages between 2.1 percent and 5.3 percent.
The semiconductor index was affected as well, declining by 3.3 percent on Tuesday.
The volume by the end of Tuesday’s exchange at Wall Street was 11 billion shares, in comparison to its average of 11.62 billion shares throughout the last 20 trading days.
