US stocks recorded their worst trading session since 2020, erasing a three-day rally, a day after the Federal Reserve raised the interest rates by 50 basis points.
• The Dow Jones fell 1,063.09 points, or 3.1%, ending at 32,997.97
US stocks recorded their worst trading session since 2020, erasing a three-day rally, a day after the Federal Reserve raised the interest rates by 50 basis points.
The Dow Jones Industrial Average fell 1,063.09 points, or 3.1%, ending at 32,997.97, its worst daily percentage drop since October 28, 2020.
The S&P 500 slipped by 153.30 points, or 3.6%, to finish at 4,146.87, while the Nasdaq Composite lost 647.16 points, or 5%, closing at 12,317.69, marking its worst daily percentage fall since June 11, 2020.
The 10-year Treasury yield jumped to 3.066%, its highest since November 2018.
On Wednesday, the US Federal Reserve raised the short-term benchmark interest rate by half a percentage point or 50 basis points and outlined its plans to shrink its $9 trillion asset portfolio.
CNBC quoted Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, who said, “If you go up 3%, and then you give up half a percent the next day, that’s pretty normal stuff. But having the kind of day we had yesterday and then seeing it 100% reversed within half a day is just truly extraordinary.”
Stocks that slipped
Large tech stocks had moved higher following the Fed announcements on Wednesday. On Thursday, the tech stocks erased all gains after coming under pressure.
Facebook-parent Meta Platforms (NASDAQ: FB) and Amazon (NASDAQ: AMZN) falling nearly 6.8% and 7.6%, respectively. Microsoft (NASDAQ: MSFT) fell about 4.4%, while Salesforce (NYSE: CRM) tumbled 7.1%. Apple (NASDAQ: AAPL) dropped nearly 5.6%.
Tesla Inc. (NASDAQ: TSLA) shares fell 8.3% after reports emerged that Musk intended to temporarily serve as chief executive at Twitter once the deal closes.