US stocks tumble as Fed chairman says more rate hikes possible
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A trader on the floor of the New York Stock Exchange, in New York City.
PHOTO: REUTERS
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NEW YORK - Wall Street stocks slumped on Thursday as Federal Reserve chairman Jerome Powell said the United States central bank is prepared to hike interest rates further, if needed, to lower inflation.
The Dow Jones Industrial Average dropped 0.7 per cent to 33,891.94, while the S&P 500 Index plunged 0.8 per cent to 4,347.35.
The Nasdaq Composite Index tumbled 0.9 per cent to 13,521.45.
The drop came after Mr Powell told a conference in Washington that progress towards policymakers’ 2 per cent goal is “not assured”.
Earlier in November, officials decided to hold interest rates at a 22-year high for a second straight meeting, fuelling hopes that the Fed was done with rate hikes.
But Mr Powell said on Thursday: “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”
His remarks were of a “different tone than he has given before”, said Mr Karl Haeling from LBBW.
“Maybe he shifted the emphasis of his views and talked more about the risks simply because with the drop in bonds yields, and the rally in stocks... you saw an easing of financial conditions,” he added.
Among individual companies, Disney shares rallied nearly 7 per cent after reporting that its profits had exceeded expectations.
Arm shares dropped 5.2 per cent after releasing its earnings report. AFP
