Stocks plunged lower on Thursday, giving back gains from Wednesday's afternoon rally, as market participants weighed the Federal Reserve's latest monetary policy decision. The Dow Jones Industrial Average fell over 1,000 points, while the S&P 500 Index and Nasdaq Composite dropped about 3.6% and 5%, respectively.
On Wednesday, the central bank raised interest rates by a half-point for the first time since 2000, shaking up a market that has become used to ultra-low rates and the Fed's accommodative monetary policy since the start of the coronavirus pandemic. The Fed also laid out its plan to start reducing its $9 trillion balance sheet starting June 1.
While Fed Chair Jerome Powell first eased Wall Street on Wednesday by suggesting the central bank was not planning a more aggressive 75 basis point rate hike in the near-term, the Fed's policy moving forward can still harm economic activity, especially as the economy already shows some signs of slowly.
"There may be some pain associated with getting back to that, but the big pain is in not dealing with inflation and allowing it to become entrenched," Powell said during a press conference on Wednesday.
Here's how the market settled on Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Jobless claims climb to 200,000, remain historically low:
First time jobless claims rose to the 200,000 threshold for the first time since February last week, but still remained around historically low levels due to the tight U.S. labor market.
Initial unemployment claims totaled 200,000 for the week ended April 29, according to the Labor Department's report published Thursday, up from the previous week's print of 181,000.
Continuing jobless claims, fell by to 1.384 million from the previous week's total of 1.403 million, marking the lowest level for the data since January 1970.
Here's how benchmarks started trading soon after market open:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
