US stock markets joined a global sell off on Thursday following news that the Federal Reserve would continue its planned interest rate hikes, a government shutdown loomed and disappointing financial results spooked investors.
The major US stock markets had all dropped more than 1% by noon on Thursday, with the S&P 500 languishing at 15-month lows.
The falls came after
Investors appear to have been spooked by the prospect of higher borrowing costs. The Fed announced its fourth interest rate hike of the year on Wednesday and Fed chair Jerome Powell indicated that while the pace of increases may slow, more were to come in 2019.
At a press conference Powell noted recent turbulence in the stock markets but said that when it came to the Fed’s decisions “no one market is the single dominant indicator”.
“All people are talking about today is the aftermath of the Fed hike. The fact that Fed just killed the notion that they are here to backstop the market,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in
“People are just trying to fall back on technicals now that fundamentals seem a little chaotic. We’re still dealing with a stock market crash and it’s going to be with us for a while. This isn’t going to end in a quick fashion.”
The latest fall in US markets comes as Donald Trump is threatening a government shutdown unless Congress agrees to fund his border wall with
“At this moment, the president does not want to go further without border security, which includes steel slats or a wall,” White House press secretary Sarah Sanders said. Mr. Trump “is continuing to weigh his options,” she said.
Disappointing earnings reports added to the US sell off.
Accenture fell 4.3% as its full-year revenue and profit outlook were largely below estimates.