Powell threw to the market; Wall Street closed with losses greater than 1%

Stock indices in the United States sank above 1% in a trading day that was marked by volatility and reactions to the decision of the Federal Reserve (Fed).

Stocks trading on Wall Street strengthened after the Fed’s 75 basis point increase in the rate, the fourth consecutive three-quarter point increase, and on the idea that a slower pace of increases could start in December. .

However, the mood of investors changed sharply as the conference by Jerome Powell, chairman of the Federal Reserve, progressed, who pointed out that the final level of interest rates could be higher than previously thought and that “it is very premature think about taking a break” in the cycle of monetary tightening.

He added that “if we push too hard, we can use our tools to respond: if we don’t push hard enough, inflation could take hold.”

The Nasdaq 100 was the hardest hit by Powell’s statements, the technology index plummeted 3.36%, bringing its annual losses close to 33 percent.

For its part, the S&P 500 lost 2.53%, compared to 1.55% lost by the Dow Jones, the index that best withstood the news.

In the futures market, it is now discounted that the terminal rate will be located at 5.10%, a new maximum, compared to the previous 5.03%.

EU empleo, solid

The S&P 500 had been lower before the announcement as ADP’s national employment report showed US private payrolls rose more than expected in October, giving the Fed more reason to continue on an aggressive path of rate increases.

The private payroll report was released on the heels of Tuesday’s data showing a jump in monthly job openings, indicating job demand remained strong.

European stocks down

European stock markets closed lower on Wednesday, with the exception of Milan, which traded in balance, in a session marked by profit-taking and investors’ caution ahead of the US central bank’s monetary policy meeting.

The Paris square registered a fall of 0.81%, Frankfurt lost 0.61%, London 0.58% and Madrid 0.38%, while Milan had a marginal increase of 0.03 percent.

The pan-European STOXX 600 index shed 0.3% and snapped a three-day streak of gains that took it to a seven-week high.

The sectors of personal and household goods, mining and technology were the most affected in the European stock market, with falls between 1.3% and 1.8 percent.