US Markets Fall as Investors Dump Stocks on Fed Rate-Hike Fears
On Thursday, major US stock indices opened lower as mounting fears of an
earlier than expected Fed rate-hike decision as early as June, seems to
be weighing on investor sentiment.
At the time of writing, the S&P 500 index was down 17 point at 2030
while the Dow Jones Industrial Average fell over 140 points to 17,385.
Meanwhile, tech heavy Nasdaq Composite index has barely managed to hold
its neck above 4700 mark, showing a cut of 37 point.
Strong earnings reports from Wal-Mart and Cisco helped restrict some
declines but with a cut of nearly 1% across all major indices, stocks
are still trading in deep negative territory.
Thursday's fall is over and above a sharp intra-day reversal on
Wednesday, led by the Fed's latest meeting minutes suggesting that the
policymakers are firm towards raising interest rates at the upcoming
FOMC meeting in June, provided that the incoming data points continues
to support the outlook of a stable recovery trend for the economy.
Global investors’ sentiment was hampered by minutes from the Fed's April
meeting and the effect was felt on the European equity indices as well.
The UK's FTSE 100 and Germany's DAX dropped over 1.5% each, while
France's CAC 40 index was down 0.9%. The Stoxx Europe 600 index was down
almost 1%, erasing its Wednesday’s entire rally.
Higher interest rates make investments in riskier assets less attractive, which now seem to force investors to dump stocks.
