Stocks fell Thursday as market sentiment soured as investors grew concerned that the Federal Reserve will continue its aggressive rate hiking campaign despite signs that inflation is cooling. The Dow Jones Industrial Average fell over 250 points, while the S&P 500 Index and Nasdaq Composite slipped about 0.8% and 1%, respectively.
Here's how the market settled on Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Wall Street added to losses from Wednesday, with the S&P 500 posting its worst day since mid-December in the previous session as fresh government data showed a slowdown in consumer spending and wholesale price inflation pressures easing.
On Thursday, Federal Reserve Governor Lael Brainard said in a speech delivered at the Chicago Booth School of Business that she expects interest rates to remain high despite recent signs that inflation is cooling.
"Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis," she said.
Also in the spotlight, the U.S. reached its debt limit on Thursday, raising concerns about what a potential default could mean for the economy and the U.S. Treasury.
In a letter addressed to House Speaker Kevin McCarthy, Treasury Secretary Janet Yellen said the Treasury will suspend new investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits from Thursday through June 5, 2023 in effort to stave off a default. However, she warned both moves are subject to "considerable uncertainty" if Congress does not pass a bill to increase the debt ceiling.
On the economic front, new U.S. home construction declined in December, marking the fourth consecutive monthly decline. Residential starts fell 1.4% last month to a 1.382 million annualized rate, according to new government data on Thursday.
Meanwhile, single-family homebuilding rose to an annualized rate of 909,000 units, applications to build decreased 1.6% to an annualized 1.33 million units, and permits for construction of single-family homes fell 6.5%.
Separately, new filings for unemployment insurance fell to 190,000 for the week ended January 14, dropping from 205,000 as the labor market remains strong despite persistently high inflation. Economists surveyed by Bloomberg expected claims to increase to 214,000.
For stocks, Procter & Gamble
"Heading into '23, we had maintained a balanced view on RBLX as we believed that strong holiday seasonality and easy comps through mid '23 would lead to a series of monthly metric releases showing accelerating bookings growth," the firm said in a note.
Looking ahead, Netflix