US Equities Fall On Powell’s Hawkish Remarks

Stocks fell after Federal Reserve Chair Jerome Powell said Fed will continue to raise rates to fight inflation in his Jackson Hole speech while The Fed’s favourite inflation measure shows prices have eased in July. The Dow Jones Industrial Average dropped 302 points, or 0.91%. The S&P 500 fell 1.11% and the Nasdaq Composite slid 1.34%.

Those moves come after a hawkish speech out of the Fed chair as Wall Street sought information on the pace of future interest rate hikes.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy,” Powell said.

Traders absorbed one of the Fed’s favourite inflation measures, the personal consumption expenditures data, which on Friday showed price increases eased in July. The University of Michigan consumer sentiment index showed a better-than-expected reading.

The major averages were on pace for their second straight down week. The Dow is on track for a 1.2% decline. The S&P 500 and Nasdaq Composite are heading to slightly smaller declines of roughly 0.7% each.

Communication services, real estate and energy underperformed in the S&P 500. Meanwhile, financial and utilities outperformed on the broader market index. Shares of Affirm declined 12% after the consumer lending company issued weak full-year revenue guidance.