Dow trades 250 points lower as JPMorgan and Goldman lead Friday’s stock-market losses

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US stocks fell on Friday, partially weighed down by the prospect of rising interest rates and weak economic data, which has cast some doubt on the strength of the recovery from the COVID pandemic.

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Meanwhile, on Friday, New York Fed Chairman John Williams, a key aide to Fed Chairman Jerome Powell, said he expects economic growth to slow to a 3.5% annual rate in 2022 from the 5.5% projected last year due to the spread of Omicron. will be in the middle. ,

What is happening
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On Thursday, the Dow fell 177 points, or 0.49%, to 36114, the S&P 500 fell 67 points, or 1.42%, to 4659 and the Nasdaq Composite fell 382 points, or 2.51%, to 14807.

what is driving the market

Sentiment on Wall Street turned sour for a volatile week that began with a decline for yield-sensitive segments of the market such as information technology stocks, followed by an unexpected series of gains, thanks to higher interest rates. Despite the high anticipation rates and overall dire financial situation.

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Concerns about the near-term economic outlook and a bumpy rotation from high-flying stocks to cyclicals were contributing to Friday’s volatility.

“I expect the current Omicron wave to slow growth over the next few months as people once again withdraw from contact-intensive activities,” the Fed’s Williams said in remarks to the Council on Foreign Relations.

Christopher Waller of the Federal Reserve government suggested on Wednesday that five interest rate hikes are likely in 2022 as the central bank aims to largely repel inflation. However, the policy makers said that their baseline expectation was for a three-year rate hike, which is higher than the expectations.

“Following a selection of updates from Fed speakers over the past few days, the three-day US tech rally fell apart, even though Treasury yields were lower,” said Ian Williams, strategist at UK broker Peel Hunt.

In US economic data, retail sales fell 1.9% in December as the Omicron version of COVID-19 slashed consumer purchases. Economists polled by The Wall Street Journal had forecast a 0.1% decline in December retail sales. Figures are adjusted seasonally.

Such sales activity is seen as a large part of consumer spending and hints at the strength of the US economy.

Meanwhile, US industrial output fell 0.1% in December, after a revised 0.7% gain in the prior month and industrial capacity utilization eased from 76.5% in the previous month to 76.6% in the previous month.

Williams said he predicts that inflation will subside at its current bullish pace. “With growth slowing down and supply constraints gradually resolved, I expect inflation to fall to around 2.5% this year,” he said.

Meanwhile, a closely-followed gauge of US consumer sentiment fell to 68.8 in January, from 70.6 in the previous month, marking the second-lowest reading in a decade, with Omicron concerns partly buoyed by its was attributed to the drop-off.

Robert Frick, corporate economist at the Navy Federal Credit Union, said the decline in consumer sentiment reflects the pain that low-income Americans are facing amid inflation.

“The January consumer sentiment reading clearly underscores that high inflation hurts low-income households the most,” he wrote in emailed comments.

“The sentiment fell sharply for households earning less than $100,000, but rose for those earning above that level. Especially with energy and food prices so high, which compared to other expenses. Incomes take up a very high percentage of the budget, putting financial strain on the 70% of American households below the $100,000 threshold,” he said.

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