US stock selloff pushes all sectors into the red
By Joseph Toppe
20:23, 16 June 2022
A day after the US Federal Reserve announced the largest interest rate hike since 1994, a frenzied selloff has sent the Nasdaq 100 (US100) and the S&P 500 (US500) to their lowest points of the year.
Piero Cingari, Capital.com analyst, says: “The stock market is experiencing another major selloff, with all sectors in the red as the S&P and Nasdaq record new year-to-date lows.”
"The stock market remains in a phase of generalised risk aversion, but soon investors will adapt to this new reality and differentiate between sectors (consumer staples, utilities, and healthcare) that do well in recessions,” he continues. “Also, companies with strong fundamentals offer stable dividends and can handle higher interest rates.”
Wall Street today: Nasdaq, S&P sink to new lows, Dow drops 741 points
On Thursday, the Dow Jones Industrial Average (US30) lost 2.42%, while the Nasdaq 100 (US100) dipped 4.02%, and the S&P 500 (US500) fell 3.25%.
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US Tech 100 Summary
Past month: -6.30%
Past 3 months: -21.19%
Year to date: -31.82%
Past year: -21.44%
Nasdaq 100 (US100) price chart
The US 500 Summary
Past month: -8.74%
Past 3 months: -16.88%
Year to date: -23.07%
Past year: -13.15
S&P 500 (US500) price chart
FOMC meeting review: Rate hike 0.75%
The Federal Open Market Committee met on Wednesday, 15 June to discuss the current state of the US economy and to announce further interest rate hikes of 0.75% to control inflation.
Cingari says: “The central bank reported inflation for the current year has been raised to 5.2%, up from 4.3% in March, while growth has been cut to 1.7%, down from 2.8% in March.”
“This is stagflation (low or no growth coupled with high inflation) in the economy, with the Fed opting for robust and persistent rate hikes to bring inflation back to target,” he continues.
“But the economy needs to slow down, and the job market needs to rebalance, which will cause the unemployment rate to rise in the coming months.”
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