Wall Street: Wall Street tumbles, weighed down by fears of a recession

by Sinéad Carew and Ankika Biswas

(Reuters) – The New York Stock Exchange ended sharply lower on Thursday as data pointing to a robust U.S. economy raised fears that the Federal Reserve (Fed) would continue to tighten monetary policy longer than expected to fight inflation, risking a recession.

The Dow Jones index fell 1.05% or 348.99 points to 33,027.49 points.

The broader S&P-500 lost 56.05 points, or 1.45%, to 3,822.39.

The Nasdaq Composite, for its part, fell by 233.25 points (2.18%) to 10,476.12 points.

The gloomy mood of the session on Wall Street was exacerbated by the gloomy forecasts communicated by Micron, whose title lost 3.4%, illustrating the difficulties in the semiconductor sector and dragging the index of this sector lower.

High-growth stocks, which were more sensitive to changes in interest rates, suffered a decline, dragging in their wake the technology sector, one of the largest sectors in the S&P-500, which suffered the most on Thursday.

The US Commerce Department issued an upward revision to US gross domestic product (GDP) growth in the third quarter to 3.2% year-on-year from 2.9% in a previous estimate. .

At the same time, data from the US Department of Labor indicated an increase in the number of weekly jobless claims in the country, but less than expected by economists.

“We are moving from one of the main concerns in 2022 – the Federal Reserve’s response to strong inflationary pressures – to the fear of 2023, which is to see a recession occur in the US and probably globally as well,” commented Matt Stucky, portfolio manager at Northwestern Mutual Wealth Management Company.

“In my mind, today’s data kind of confirms the direction we’re going,” he said, adding that high inflation, the sluggish economy and market condition Labor should put investors on notice that earnings forecasts are too high for next year.

Under pressure from fears that repeated Fed rate hikes will plunge the US economy into recession, the main Wall Street indexes are on course for their biggest annual decline since the 2008 financial crisis.

Tesla saw its stock plunge 8.9% after the automaker announced a further cut in car models in the US amid concerns about demand.

(French version Jean Terzian)

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