NEW YORK, April 23 — Wall Street tumbled more than 2.5 per cent yesterday, ensuring the three main benchmarks ended in negative territory for the week, as surprise earnings news and increased certainty around aggressive near-term interest rate rises took its toll on investors.
The idea of “front-end loading” the US central bank’s retreat from super-easy monetary policy, which Powell articulated support for on Thursday, has also forced traders to re-evaluate how aggressive subsequent rate rises would be. HCA slumped 21.8 per cent after reporting a downbeat profit view, while other hospital operators felt the contagion: Tenet Healthcare, Community Health Systems and Universal Health Services all tumbled between 14 per cent and 17.9 per cent.
Materials was weighed down by Nucor Corp — down 8.3 per cent after hitting a record high after posting earnings on Thursday — and Freeport-McMoRan Inc, which slipped 6.8 per cent as investors fretted over how interest rate hikes would impact copper miners. The prospect of a more hawkish Fed has led to a rocky start to the year for equities, with yesterday's sell-off taking declines on both the S&P and Dow since the start of the year beyond 10 per cent.