Committee Members Discuss Possibility of Interest Rate Hike
The New York Stock Market fell as the minutes of the Federal Open Market Committee (FOMC) regular meeting in May were reportedly more hawkish than expected.
On the 22nd (local time), the Dow Jones Industrial Average closed at 39,671.04, down 201.95 points (0.51%) from the previous trading day at the New York Stock Exchange (NYSE). The S&P 500 Index ended trading at 5,307.01, down 14.40 points (0.27%), and the tech-heavy Nasdaq Index closed at 16,801.54, down 31.08 points (0.18%).
Among major stocks, Apple fell by 0.75% and Alphabet dropped by 0.86%. Tesla fell by 3.48%. On the other hand, Microsoft Corporation (MS) rose by 0.34% and Meta increased by 0.68%. NVIDIA fell by 0.46% but showed a strong increase of over 5% in after-hours trading following the announcement of positive results after the market closed.
Investors were shaken when the U.S. Federal Reserve (Fed) members’ hawkish views were disclosed in the minutes of the regular FOMC meeting held earlier this month.
According to CNBC, the minutes stated that there has been insufficient progress in reducing inflation over the past few months. Furthermore, several committee members expressed their willingness to raise interest rates if inflation does not continue to fall toward the target of 2%.
Chief Investment Officer (CIO) of Independent Advisor Alliance Chris Zaccarelli, analyzed, “The hawkish tone of the minutes is an official declaration to keep interest rates at a higher level for a longer period.” He added, “However since Federal Reserve Chairman Jerome Powell officially excluded the interest rate hike from the table, the market will move according to other factors.”
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