June 16 (Reuters) – The New York Stock Exchange opened sharply lower on Thursday, hurt by growth stocks, after the Federal Reserve (Fed) carried out its biggest rate hike since 1994 to stem inflation, fueling fears of an economic recession.
In early trading, the Dow Jones index lost 726.37 points, or 2.37%, to 29,942.16 points, falling below 30,000 points for the first time since January 2021.
The broader Standard & Poor’s 500 fell 2.67% to 3,688.89 points. For its part, the Nasdaq Composite lost 2.78%, or 308.063 points, to 10,791.092.
Wall Street ended in the green on Wednesday after monetary policy announcements from the Fed, which raised, as expected, its main interest rate by 75 basis points and whose chairman Jerome Powell clarified that he will not didn’t expect a rate hike of this magnitude to become “business as usual”.
But fears about the pace of economic growth are now taking over as the institution has itself said that it expects an economic slowdown and rising unemployment in the coming months.
“The Fed is now painting a central scenario that is much closer to a hard landing,” said Deutsche Bank strategist Jim Reid in a note.
On the macroeconomic front, manufacturing activity unexpectedly contracted in the Philadelphia area in June, its index falling to its lowest level since May 2020, at -3.3 after 2.6 in May.
Weekly jobless claims fell less than expected to 229,000, the Labor Department said.
This context primarily penalizes growth stocks: Apple lost 3.08%, Microsoft 2.11% and Nvidia 4.04%.
Twitter stands out with a gain of 0.63% after information from the Wall Street Journal according to which Elon Musk should confirm during the day to employees of the social network his intention to buy the group.
(Written by Juliette Portala)