THE GIST (“THE WHAT”)
The S&P 500 index closed the session lower after the Federal Reserve raised rates by 25 basis point, its 10th consecutive rate hike in its attempt to fight inflation. Markets pulled back alongside Jerome Powell’s press conference when he did not rule out additional rate hikes if warranted. The index closed 28.83 points lower at 4090.74, down 0.70%.
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THE DETAILS (The “How & Why”):
The index traded modestly higher during the early session following better-than-expected ADP Employment and ISM services reports. Regional bank stocks also attempted a rebound at the open after being slammed in the previous session on concerns of credit tightening.
The sector, however, gave up the early gains and closed deep in the red following Powell’s press conference, wherein, he did not rule out further rate hikes in its fight to bring down the inflation to 2% target level. PacWest Bancorp plunged 50% during the after-trading hours on reports that the bank is exploring strategic options, including a sale.
Oil prices continued their trend down on the back of weaking Chinese demand and growing global recessionary worries, hitting their lowest level since March despite reports of falling inventories. Energy stocks traded lower for the second day in a row.