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Jerome Powell’s comments, before Jackson Hole Symposium, have fuel 1,000-point market collapse, on Friday, as stocks slid for a second week.
US equities fell after Powell had said the US central bank “won’t back off in its fight against rapid inflation”. The Dow Jones Industrial Average dropped 1,008.38 points, or 3.03%, to 32,283.40, with losses accelerating into the close. The S&P 500 fell 3.37% to 4,057.66, and the Nasdaq Composite slid 3.94% to 12,141.71.
The US Dollar Index has surged and managed to regain the uptrend after Fed Chairman Jerome Powell’s speech before Fed’s annual Jackson Hole Symposium, Friday morning, as the US central bank chair stressed that the monetary policymakers do not have the luxury to stop raising interest rates in the coming FOMC meetings.
The Dollar Index, which measures the performance of the US currency against the major rival currencies, rose to 108.75 points, compared to the last daily close, which recorded 198.47 points.
Economic Data
As measured by the Personal Consumption Expenditures (PCE) Price Index, Inflation in the US declined to 6.3% in July from 6.8% in June, the US Bureau of Economic Analysis reported on Friday. This reading came in much lower than the market expectation of 7.4%. The Core PCE Price Index, which excludes volatile food and energy prices, edged lower to 4.6% from 4.8% in the same period, compared to the market expectation of 4.7%.
The University of Michigan Surveys of Consumers Sentiment was revised upwards in August, with the final print arriving at 58.2 vs. the preliminary reading of 55.1 and 55.2 expected.
Other Developments
Oil prices closed higher on Friday, boosted by signals from Saudi Arabia that OPEC could cut output, but trading was volatile as investors digested and ultimately shrugged off warnings from the head of the US Federal Reserve about economic pain ahead.
Brent crude futures rose $1.65 to settle at $100.99 a barrel. US West Texas Intermediate (WTI) crude futures rose 54 cents to settle at $93.06 a barrel. Both contracts rose and fell by $1 throughout the session.
Cryptocurrencies and stocks both pushed lower following Fed Chair Jerome Powell’s speech today. Both cryptocurrencies and major stock indexes lost value this morning, as global market participants responded to the hawkish language that Powell used in his keynote speech. In general, risk assets suffered losses after the hawkish speech.
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