https://sputnikglobe.com/20220506/wall-streets-tech-stocks-index-nasdaq-slips-below-12000-first-time-since-november-2020-1095316301.html
Wall Street's Tech Stocks Index Nasdaq Slips Below 12,000 First Time Since November 2020
Wall Street's Tech Stocks Index Nasdaq Slips Below 12,000 First Time Since November 2020
Sputnik International
NEW YORK (Sputnik) - Wall Street’s selloff deepened on Friday, with the Nasdaq indicator for Big Tech stocks slipping below the 12,000-point level the first... 06.05.2022, Sputnik International
2022-05-06T15:27+0000
2022-05-06T15:27+0000
2022-05-06T15:40+0000
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The Nasdaq Composite Index — one of the three major US stock indices which groups top technology names such as Facebook (banned in Russia), Amazon, Apple, Netflix and Google — was down 1% by 10:30 AM ET (14:30 GMT), hovering at 12,210 after falling to as low as 11,992 earlier. For the week, Nasdaq was also down 1%, heading for its fifth straight week of losses. Year-to-date, the Big Tech indicator is down 22%.Nasdaq aside, the S&P 500 Index for the top 500 US stocks was down about 1%, extending Thursday’s 3.4% drop. The broad-based Dow Jones Industrial Average Index was also off by nearly 1%, after the previous session’s decline of 3.1%.The latest drop came on the back of the April jobs report from the Labor Department that showed US employers adding a stronger-than-expected 428,000 positions for last month, leaving the unemployment rate unchanged at 3.6%.The Fed defines an unemployment rate of 4% and below as "maximum employment." The central bank is closely watching each month’s jobs report to decide on the rate hikes that will be needed to contain inflation expanding faster than an economy growing at its quickest pace in four decades.The Fed this week raised US interest rates by their most in 20 years, adding a half-percentage point to an earlier quarter-point hike in March, after leaving rates at almost zero in the two years prior owing to the coronavirus pandemic.Fed Chairman Jerome Powell said the US economy was strong — with its job market particularly resilient from record employment growth over the past year — and there was little chance of the country slipping into recession even if the central bank were to introduce a couple more half-percentage point rate hikes after this to beat the worst inflation since the 1980s.Economists noted that the April jobs report had validated Powell’s remarks and was likely to embolden the Fed to stay on the path of aggressive monetary tightening.The central bank plans another five rate hikes before the end of 2022, or seven altogether for this year. It also said it will likely extend the tightening cycle into 2023 to bring inflation to its desired level.After contracting 3.5% in 2020 from disruptions forced by COVID-19, the US economy expanded by 5.7% in 2021, growing at its fastest pace since 1982.But inflation grew even more. The Personal Consumption Expenditure Index, a US inflation indicator closely followed by the Fed, rose by 5.8% in the year to December and 6.6% in the 12 months to March. Both readings also indicated the fastest growth since the 1980s. The Consumer Price Index, another key measure for inflation, rose 8.5% in the year to March.The Fed’s own tolerance for inflation is a mere 2% per year and Chairman Powell has expressed confidence that the labor market, which added a record 1.7 million jobs in the first three months of 2022, would help the central bank meet its objective of balancing economic growth with higher rates.
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Wall Street's Tech Stocks Index Nasdaq Slips Below 12,000 First Time Since November 2020
15:27 GMT 06.05.2022 (Updated: 15:40 GMT 06.05.2022) NEW YORK (Sputnik) - Wall Street’s selloff deepened on Friday, with the Nasdaq indicator for Big Tech stocks slipping below the 12,000-point level the first time since November 2020, after a stronger-than-expected US jobs report for April suggested the Federal Reserve will hike rates even more to beat inflation.
The Nasdaq Composite Index — one of the three major US stock indices which groups top technology names such as Facebook (banned in Russia), Amazon, Apple, Netflix and Google — was down 1% by 10:30 AM ET (14:30 GMT), hovering at 12,210 after falling to as low as 11,992 earlier. For the week, Nasdaq was also down 1%, heading for its fifth straight week of losses. Year-to-date, the Big Tech indicator is down 22%.
Nasdaq aside, the S&P 500 Index for the top 500 US stocks was down about 1%, extending Thursday’s 3.4% drop. The broad-based
Dow Jones Industrial Average Index was also off by nearly 1%, after the previous session’s decline of 3.1%.
The latest drop came on the back of the
April jobs report from the Labor Department that showed US employers adding a stronger-than-expected 428,000 positions for last month, leaving the unemployment rate unchanged at 3.6%.
The Fed defines an unemployment rate of 4% and below as "maximum employment." The central bank is closely watching each month’s jobs report to decide on the rate hikes that will be needed to contain inflation expanding faster than an economy growing at its quickest pace in four decades.
The Fed this week
raised US interest rates by their most in 20 years, adding a half-percentage point to an earlier quarter-point hike in March, after leaving rates at almost zero in the two years prior owing to the coronavirus pandemic.
Fed Chairman Jerome Powell said the US economy was strong — with its job market particularly resilient from record employment growth over the past year — and there was little chance of the country slipping into recession even if the central bank were to introduce a couple more half-percentage point rate hikes after this to beat the worst inflation since the 1980s.
Economists noted that the April jobs report had validated Powell’s remarks and was likely to embolden the Fed to stay on the path of aggressive monetary tightening.
"The Fed chair [is] saying the Fed is not looking to raise rates by 75 basis points," economist Greg Michalowski said in a post on the ForexLive platform. "The market disagrees as they price a 83% chance of a 75 basis point hike at the June meeting."
The central bank plans another five rate hikes before the end of 2022, or seven altogether for this year. It also said it will likely extend the tightening cycle into 2023 to bring inflation to its desired level.
After contracting 3.5% in 2020 from disruptions forced by COVID-19, the US economy expanded by 5.7% in 2021, growing at its fastest pace since 1982.
But inflation grew even more. The Personal Consumption Expenditure Index, a US inflation indicator closely followed by the Fed, rose by 5.8% in the year to December and 6.6% in the 12 months to March. Both readings also indicated the fastest growth since the 1980s. The Consumer Price Index, another key measure for inflation, rose 8.5% in the year to March.
The Fed’s own tolerance for inflation is a mere 2% per year and Chairman Powell has expressed confidence that the labor market, which added a record 1.7 million jobs in the first three months of 2022, would help the central bank meet its objective of balancing economic growth with higher rates.
