4:05pm: US stocks close in the red
US stocks continued their downward spiral into Thursday afternoon, as investors weigh up the Fed’s decision to raise the interest rate in a bid to curb inflation.
The Dow lost 1,063 points, closing at 32,998 points.
The S&P 500 finished the day down 153 points at 4,147 points and the Nasdaq closed down 647 points at 12,318 points.
12:05pm: US stocks tanking at noon
US stocks continued to tumble at midday amid recession fears following the Fed’s decision on Wednesday to raise the interest rate by a half point.
At noon, the Dow had slipped 3% or 1,052 points to 33,009 points.
The S&P 500 was down 3.6% to 4,143 points and the Nasdaq had dropped 4.9% to 12,330 points.
CMC Markets UK chief market analyst Michael Hewson said that US markets were set to give up all their post Fed gains, led by the tech-laded Nasdaq.
“On the earnings front, ecommerce companies are getting hammered after eBay Inc, Shopify (TSX:SH., NYSE:SHOP) Inc and Etsy (NASDAQ:ETSY) Inc all reported disappointing revenues and/or guidance numbers,” Hewson said.
At noon, eBay shares were down about 10%, Shopify (TSX:SH., NYSE:SHOP) shares had slipped about 15%, and Etsy (NASDAQ:ETSY) shares had tumbled about 17%.
Meanwhile, Twitter Inc (NYSE:TWTR) shares were up more than 3% following the news that Tesla Motors CEO Elon Musk has secured $7.1 billion in funding for his acquisition of the social media company.
Musk has lined up 19 investors for his $44 billion purchase, including a $1 billion contribution from Oracle Corporation (NYSE:ORCL) co-founder Larry Ellison.
11.10am: Proactive North America headlines:
Bill Gates says Elon Musk could worsen Twitter's misinformation issues
Belmont Resources says drilling at Lone Star JV continues to intersect wide zones of significant copper mineralization
Japan Gold (TSX-V:JG) to advance high-ranked prospects at Ikutahara project in Japan with start of its 2022 exploration program
Genprex CEO shares key progress for non-small cell lung cancer treatment REQORSA in shareholder letter
SPYR (OTCQB:SPYR) Technologies says its Applied Magix subsidiary mulls developing software for non-branded smart products
Goldshore Resources intersects significant high-grade gold mineralization at Moss Lake project in Ontario
American Manganese says preliminary study shows environmental benefits of its lithium-ion battery recycling process
Context Therapeutics (NASDAQ:CNTX) announces poster presentation at upcoming 2022 ASCO annual meeting
Vejii Holdings launches new prepared meal delivery program with Plantable Health ready-made offerings
Renforth says fieldwork on Surimeau project has commenced with focus on lithium values and exploration
Cypress Development closes acquisition of Enertopia’s Clayton Valley lithium claystone project in Nevada
AMPD Ventures strikes reseller agreement with Hammerspace to enhance its virtual studio offering
Perma-Fix Environmental sees 'improved' results in March and expects revenue to expand in 2Q
CleanSpark reports monthly production of 313 bitcoin in April 2022,with calendar year production at 1,211
Endeavour Mining highlights rising adjusted net earnings, cash returned to shareholders in 1Q results
Golden Tag Resources anticipates expanding Fernandez zone at its San Diego project in Mexico following promising drill results
Skye Bioscience says study shows enhanced reduction in intraocular pressure with its SBI-100 formulation for glaucoma
ESE Entertainment says its media company Frenzy to produce Tom Clancy's Rainbow Six Siege league in Europe
i-80 Gold reveals fresh positive drill results from underground drill program at Granite Creek
Psyched Wellness (CSE:PSYC, OTCQB:PSYCF) hires marketing and communications professional Del Mahabadi
Group Eleven Resources reports best assays to date from first hole at Tullacondra prospect in Ireland
SpotLite360 IOT Solution unveils highlights of financial year 2021
Kainantu Resources sees 4Q 2021 results show prudent management of balance sheet and capital resources
Information Services declares 23 cent dividend after rise in Q1 revenue and profit
Nextech AR Solutions announces launch of 365 Marketplace with Restaurants Canada
Empower Clinics updates on key business initiatives as company reiterates important role in the healthcare industry
10.00am: US benchmarks plunge at open
US stocks tanked at the open on Thursday as markets digested the Fed's interest rate hike and some big stocks took a share tumble.
The Dow Jones Industrial Average plunged 432 points at 33,629. The S&P 500 lost 68 points at 4,231. The Nasdaq shed around 293 points to stand at 12,671.
Yesterday, the US central bank announced a half-point rate hike - the first in 22 years, but it did say that bigger rises were not being actively considered.
Salesforce shares and Home Depot are off around 3% and 2.75% in early deals respectiovely as the the two big name groups, which is contributimngh to the Dow Jones' plummet.
6.30am: Stocks heading lower
US stocks were expected to open lower on Thursday after the Federal Open Market Committee on Wednesday delivered a 50-basis point (bp) rate hike and paved the way for a series of aggressive increases to help fight runaway inflation.
Stocks rose strongly in the wake of the news that the Fed had not considered a larger 75 basis point rate increase but much of the optimism has begun to fade amid expectations that interest rates will still have to rise rapidly to ward off further spikes in inflation, possibly denting economic growth.
Futures for the Dow Jones Industrial Average fell 0.4% in pre-market trading, while those for the broader S&P 500 index shed 0.6%, and contracts for the Nasdaq-100 lost 0.7%.
“At this point, many expect the Fed to raise the rates above the neutral-rate estimate of about 2.5% by the end of this year to tame inflation, and Bloomberg economists believe that the balance sheet will come back to the pre-pandemic levels by 2024. But we will still be only half-way from the levels pre-2007/2008 subprime crisis,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Therefore, there is still a lot of room for more Fed hawkishness,” she said, adding that just how hawkish the Fed could get would depend on how inflation pans out.
As investors think this over, some of the early cheer which on Thursday lifted the S&P 500 by around 3%, the Nasdaq about 3.4% and the DJIA around 2.8 % has begun to wane. Investors are increasingly worried that higher interest rates will crimp economic growth at a time when the strength of the dollar is also likely to weigh on US exports.
For much of the market, yesterday was a case of "case of sell the rumor, buy the fact," noted Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA.
“In fact, Mr. Powell didn’t specifically rule out a 0.75% hike next month, citing the need to be ‘nimble’,” he pointed out.
Elsewhere, signs of emerging supply chain issues also weighed on sentiment.
“The extent of the impact of China’s Covid-zero policies on the domestic economy was highlighted this morning as the Caixin Services PMI for April recorded its second-largest fall on record,” added Halley.
“China is tightening Covid-19 restrictions in Beijing and extending them elsewhere as its Covid-zero policy continues to weigh on the domestic economy and exacerbate supply-chain issues internationally,” he said.
Benchmark crude oil prices were slightly higher. Brent crude futures were up 0.3% at $110.46 a barrel while WTI futures rose 0.05% to $107.86 a barrel.
Contact the author at jon.hopkins@proactiveinvestors.com