Wall Street Indices Down as Powell Signals Further Rate Hikes | June 21, 2023

Wall Street witnessed a downward trajectory for a third consecutive day as the market was impacted by a slump in growth stocks, primarily due to Federal Reserve chair Jerome Powell's hawkish remarks indicating imminent interest rate hikes. While Powell suggested the possibility of these hikes occurring at a more moderate pace moving forward, the impact on the market was evident. The Nasdaq Composite was hit hardest with a decline of 1.21%, while the S&P 500 and Dow Jones slipped by 0.52% and 0.30% respectively. In the S&P sectors, Technology, Communication Services, and Consumer Discretionary were the most negatively affected, while the Energy sector surprisingly saw gains.

Despite the market reactions, Powell's comments didn't substantially sway interest rate expectations, with only one more rate hike anticipated for the remainder of the year as opposed to the Fed's projection of two. However, these remarks might trigger market participants to rethink their forecasts. It's also noteworthy that the market downturn was driven by renewed concerns about further interest rate hikes and persistent inflation pressures. Mixed results were seen for Treasury yields, with the 10-year yield experiencing a minor drop and the more rate-sensitive 2-year yield rising slightly. This turbulent market performance underscores the importance of closely monitoring fiscal and monetary policy developments for informed investment decisions. #SPX #NDX #DJI #News #MarketUpdate