Sep 26, 2022, at 9:24 PM
VOT Research Desk
U.S Stocks searching for a direction
Investors are rattled by fears of excessive Fed tightening and a wild run in currency markets.
In afternoon trading, the S&P 500 plunged 0.6 percent, while the Dow Jones Industrial Average fell more than 200 points, or 0.7%.After losing more than 1%, the technology-heavy Nasdaq Composite fell 0.1 percent. Meanwhile, Wall Street’s expectations for short-term market volatility were measured by the CBOE Volatility Index (VIX), which reached its highest level since June 17.
The moves come after a brutal selling period that was sparked by growing expectations that policymakers at the central bank might start a recession as they raise interest rates to fight inflation that has been high for decades.
After suffering a weekly loss of 4%, the Dow Jones Industrial Average reached a 2022 low on Friday. Over the same time, the benchmark S&P 500 lost 4.6 percent, teetering close to its June 16 low of 3,666.77 before closing at 3,693.23.Additionally, the Nasdaq Composite, which is dominated by technology, reported a weekly loss of approximately 5.1%.
In other parts of the market, skepticism was the norm. The rate-sensitive 2-year Treasury note surged above 4.28 percent, a new 15-year high, while the 10-year Treasury yield surpassed 3.82 percent, the highest level since April 2010.
Brent crude oil futures fell below $85 per barrel, the lowest level since January, in commodities markets, while the dollar index rose to its highest level since May 2002 in currency markets.
Following the British pound’s ups and downs, volatility across the Atlantic was also the topic of conversation early in the week. After the new British government announced plans to increase spending and implement Britain’s largest tax cut in 50 years, the currency fell by approximately 4% to approximately $1.03. This resulted in an all-time low against the U.S. dollar. The pound found its feet and returned to $1.07
“The concern is that not only will borrowing rise to eye-watering levels, but also that this tax giveaway, which provides higher earners with the larger tax break, will exacerbate inflation, which already exists.
