Grim news on the markets as they closed out the week sharply lower. The Dow Jones Industrial Average ended Friday at 29,665, though it dipped down to 29,250 earlier in the day. The NASDAQ Composite closed the day at 10,868; the S&P 500 at 3,693.
The AP reports:
Stocks tumbled worldwide Friday on mounting signs the global economy is weakening just as central banks raise the pressure even more with additional interest rate hikes.
The Dow Jones Industrial Average fell 1.6%, closing at its lowest level since late 2020. The S&P 500 fell 1.7%, close to its 2022 low set in mid-June, while the Nasdaq slid 1.8%.
The selling capped another rough week on Wall Street, leaving the major indexes with their fifth weekly loss in six weeks.
Not a very encouraging sign, despite the recent passage of the “Inflation Reduction Act.” Friday’s dismal Wall Street news, of course, comes on the heels of the Federal Reserve’s 75-basis-point rate hike, announced Wednesday.
Per the Washington Post:
The full weight of the Fed’s actions since March — pushing a key interest rate up by 3 percentage points already, with more increases still to come — may not be felt until later this year or next. But financial markets are taking in the central bank’s promise and sending alarms back out — making clear that no matter how many times Fed officials say they’re going to do whatever they can to crush inflation, the idea still roils Wall Street.
The Post, of course, is also concerned about the potential negative ramifications (for Democrats) in the midterms:
The bad market news — and the Fed’s forecast of a sharply slowing economy — could also affect campaigns for this fall’s midterm elections in Congress, where Republicans have been hoping voters will blame President Biden and Democrats for high inflation. Inflation has become a somewhat less salient issues among voters, as people say they’re feeling better about the economy and getting some breathing room from falling gas prices. But turmoil in the markets could become a hot topic on the trail.
It’s nice that some Americans are “feeling better” about the economy in recent weeks. Those racking up credit card debt trying to cover their expenses and watching their retirement savings dwindle might not share that sentiment.
On the bright side, at least President Biden didn’t mark the occasion by celebrating on the White House lawn, as he did ten days ago when the Dow dropped over 1,200 points (to 31,105). Oh, wait…