Dow, S&P post worst week in months after Hawk’s Federal Reserve Board of Governors spied on investors

File photo: On February 10, 2009, you can see a road sign outside the New York Stock Exchange on Wall Street, New York. REUTERS / Eric Thayer / File Photo

June 18, 2021

David French

(Reuters) – US Federal Reserve Board of Governors James Bullard said the US central bank could raise interest rates faster than scared investors expected, with Dow. The S&P 500 posted its worst weekly performance in a few months, as US stocks fell sharply on Friday.

The Dow Jones Industrial Average and the S&P 500 benchmark started the week at record closing prices, but ultimately fell the most of any week since late October and late February respectively.

The tech-intensive Nasdaq index also fell, although it hit a record two results in the past five days.

Investor confidence in existing positions was initially weakened by the Fed’s policy advice. He showed that interest rate hikes had to happen sooner than expected, which allowed us to start talking about scaling back stimulus on a large scale rather than just thinking. about that.

Federal Reserve Bank of St. Louis Governor Bullard said he was one of seven officials who saw rate hikes start next year to curb inflation on Friday.

Inflation and how the US central bank will tackle it when the country leaves the pandemic for the policy meeting that ended on Wednesday was at the heart of investors.

“I’m not surprised to see the market sell off a bit,” said Tim Grisky, chief investment strategist at Inverness Counsel in New York City.

Wall Street’s horror gauge, the CBOE Volatility Index, closed at a four-week high on Friday.

“Next week, various Federal Reserve boards will be giving speeches. We will do the same. Some governors will be more hawkish and others more conciliatory, so we’re going to come and go a few times. Probably, ”Grisky says. Added.

The Dow Jones Industrial Average fell 533.37 points (1.58%) to 33,290.08 on Friday, the S&P 500 fell 55.41 points (1.31%) to 4,166.45 and the index Nasdaq composite lost 130.97 points (0.92%) to 14,030.38. It was.

Following Bullard’s comment, the US dollar appreciated, pushing the greenback tracking index against six major currencies to its highest level since mid-April.

U.S. crude oil prices, which suffered from the strong dollar, initially fell on Friday, but recovered as producer groups expected U.S. oil production growth to be limited this year, according to from OPEC sources. [O/R]

The rise in commodities did not lead to a positive sentiment towards US energy stocks. The index for this sector recorded the worst performance of the day. Utilities and financial indicators also fell by more than 2%.

Friday was also “Fourx Witch Day” and US options and futures expired quarterly at the same time. Randy Frederick, vice president of trading and derivatives at Charles Schwab, said it was the biggest option expiration in history.

Volume on the US stock exchange was 14.97 billion shares, compared to an average of 10.96 billion shares over the past 20 trading days.

(Reporting by Sagarika Jaisinghani, Medha Singh, Shashank Nayar in Bangalore, David French in New York, edited by Maju Samuel and Diane Craft)

Dow, S&P post worst week in months after Hawk’s Federal Reserve Board of Governors spied on investors

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