Nasdaq plunges more than 4% amid worsening US stocks selloff

accreditation
0:00
play article
Subscribers can listen to this article
SA's public debt is a threat to economic growth.
SA's public debt is a threat to economic growth.
Getty Images

Wall Street stocks sank Thursday morning, reversing the prior session's gains as markets reassessed the Federal Reserve's moves to tighten monetary policy in response to inflation.

Near 1500 GMT, the Dow Jones Industrial Average was down 2.7 percent at 33,157.59.

The broad-based S&P 500 fell 3.1 percent to 4,166.29, while the tech-rich Nasdaq Composite Index tumbled 4.3 percent to 12,409.31.

The central bank's policy meeting had concluded Wednesday with a half-point rate increase as expected, but no sign that the Fed was willing to make a three-quarter point increase in the future, a reassuring sign to markets nervous about high borrowing costs.

Major indices finished that day's trading up around three percent in a relief rally after Fed Chair Jerome Powell expressed confidence the US central bank could engineer a "soft landing" that tames inflation without sending the economy into a recession.

But markets were reevaluating the situation on Thursday.

Patrick O'Hare of Briefing.com said the prior session's rally was fueled by "a counter-intuitive catalyst" and noted that high interest rates are traditionally not positive for equities.

"When the Fed is aiming to slow demand with rising interest rates, in an effort to squash inflation, it stands to reason that earnings growth is going to slow as well," he wrote in analysis.

"Market participants should be careful about what they wish for and rally around -- or at least be more discerning as they do because the Fed is still just getting started."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.60
+0.8%
Rand - Pound
19.71
+0.6%
Rand - Euro
16.74
+0.8%
Rand - Aus dollar
11.17
-0.1%
Rand - Yen
0.12
+0.8%
Gold
1,853.67
+0.2%
Silver
22.11
+0.4%
Palladium
2,074.50
+2.7%
Platinum
957.50
+0.7%
Brent Crude
117.40
+2.9%
Top 40
63,883
+1.4%
All Share
70,486
+1.4%
Resource 10
76,948
+0.6%
Industrial 25
76,115
+1.3%
Financial 15
16,257
+2.5%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot