May 5, 2022.
The stock market moved sharply lower on Thursday, reversing all of its gains from the previous session when the Federal Reserve raised interest rates by a half-percentage point.
Despite a post-Fed rally a day earlier, the ongoing market sell-off continued with a vengeance.
The market is on pace for its worst day since 2020 as the S&P 500 is down 3.9% and the Nasdaq is down 5.1%.
Thursday's declines reversed all of the market's gains from a day earlier, when investors cheered a half-percentage point interest rate hike from the Federal Reserve.
Despite the Fed's big announcement, stocks were back down again as investors continued to dump shares of tech companies, which have been especially hard-hit by the broader market sell-off so far this year.
eBay lost over 10%, while other e-commerce companies lost between 17% and 16%, after disappointing first quarter earnings on Thursday.
Amazon and Facebook-parent Meta both fell around 7%, while Microsoft lost over 4%.
The 10-year Treasury note was trading above 3% for the first time in over a year.
The S&P 500 gained 3% and the tech-laden Nasdaq gained 3.2% on Wednesday, after the Federal Reserve raised rates. The recent market moves have been very choppy, with the market still recovering from the April sell-off. The S&P 500 recorded its worst month since March 2020, falling 8.8%, while the Dow recorded its worst month since March 2020, falling 4.9%. The Federal Reserve will likely have a hard time raising interest rates without hurting economic growth, as many analysts warn.
There is a battle going on between dip buyers and those who think there is more downside to come. He believes that markets are in a difficult period and that there is still more downside to come.
Jeffrey Roach, chief economist for LPL Financial, says that the central bank's latest move confirms the base case scenario that the markets wrongly priced in aggressive Fed action this year. Inflation risks linger from the Russian invasion and China's extreme COVID lockdowns, even though the Fed said it is prepared to adjust policy as needed.
After the Federal Reserve Hikes Interest Rates, the DOW jumps 900 points.
The Fed allowed the biggest interest rate hike in 22 years to fight inflation.
The markets are higher, but experts don't like it.
Will the economy fall into recession after the Fed's selloff? (Forbes)
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