A massive Wall Street sell-off on Friday sent the Dow into a bear market. Fed gave up hope For a “soft landing” and beyond aggressively raise interest rates to combat inflation — even if it means a deeper recession.
The Dow Jones Industrial Average is down more than 700 points and the S&P 500 is down nearly 100 points, down 2.65% from its pre-market starting point.
The Nasdaq Composite, dominated by tech stocks, plunged more than 300 points (2.75%).
The Dow is now down 20% from its all-time high, officially placing it in bear market territory.
Brad McMillan, chief investment officer at Waltham, Massachusetts-based Commonwealth Financial Network, told the Post: “And, actually, there are a lot of things to worry about.”
Markets were rattled by the Fed’s recent 75 basis point rate hike and the sharp depreciation of the British pound against the US dollar.
Britain’s new prime minister, Liz Truss, surprised investors around the world on Friday when she announced the government would seek tax cuts and more borrowing to lift the UK economy out of the doldrums.
The announcement sent stocks, bonds and the British pound plunging, fueling fears of a global recession.
“The market is finally starting to take the Fed’s word,” said Chris Zaccarelli, chief investment officer at Charlotte, a North Carolina-based independent advisor alliance. will cause,” he said.
“This is bad news for financial markets, bad news for workers and the economy.”
“Things will get worse before they get better, but they will get better,” Zaccarelli said.
“Unfortunately, it will take time for the situation to improve.”
McMillan said investors should prepare for a bumpy road.
“The Federal Reserve Promise to raise interest rates until inflation hits That’s what sparked the current new recession and why we should be alarmed,” McMillan said. “The market turmoil will continue for some time,” he said.
McMillan said the Fed relies on a proven formula: short-term pain followed by long-term gains.
“The Fed is doing surgery on the economy right now,” he said. “In the short term, it hurts. But in the long term?”
“This is a recovery process that sets the stage for a healthier economy and markets.”