Dow, Nasdaq Futures Dive Upto 3%: Wall St Crashes on Powell’s Speech, Wild Swings

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Dow, Nasdaq Futures Dive Upto 3%: Wall St Crashes on Powell’s Speech, Wild Swings
Credit: © Reuters.

By Malvika Gurung -- US stocks swayed wildly post amid high volatility induced after the Federal Reserves’ Nov policy outcome and FOMC’s statement, followed by Fed Chair Jerome Powell’s press conference on Wednesday.

Wall Street witnessed a lower opening ahead of the Fed’s Nov policy outcome, as a higher-than-expected private payroll report in October dimmed hopes of the central bank easing on aggressive rate tightening in the December policy meeting.

However, the central bank delivered an expected 75 bps rate hike, along with dovish statements that signalled a possibly slower monetary tightening going ahead, which led to a brief rally on the Street.

However, the stocks began to decline after Powell’s news conference. In a briefing with reporters, the Fed Chair said that the path to achieve a ‘soft landing’ has narrowed as the inflation hasn't come down.

Powell struck several hawkish notes in the press conference, one of which was that it is ‘very premature to think about pausing rate hikes’. He said that the Fed may begin discussing slower rate hikes at its December policy meeting, adding that no decision has been made yet on the actions to be conducted at the year-end meeting.

A statement that particularly sent the US stocks tumbling was, “the incoming data since our last meeting suggests the ultimate level of interest rates will be higher than previously expected”.

US stocks reversed their gains and major Wall Street indices Nasdaq Composite crashed 3.3%, Dow Jones tanked 1.2% and S&P 500 plunged 2.2% at the time of writing.

Dow Jones Futures declined 1.1% and Nasdaq 100 Futures tumbled 2.83%.

Read Also: Wall Street’s Reaction to Fed’s Rate Hike & Statement Ahead of Powell's Conference

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