Wall Street's benchmark S&P 500 index fell Thursday by its biggest one-day margin this year after U.S. Federal Reserve Chair Jerome Powell warned rates might be raised faster than expected to cool stubbornly high inflation.
In early trading, the FTSE 100 in London fell 1.5% to 7,760.88 and Frankfurt's DAX tumbled 1.9% to 15,329.28. The CAC 40 in Paris fell 1.9% to 7,177.35.On Thursday, the S&P 500 fell 1.9%, further eroding this year's gains. Some 95% of companies in the benchmark index declined.SVB Financial Group lost 60% of its value after announcing plans to raise up to US$1.75 billion to strengthen its financial position amid concerns about higher interest rates and the economy.
A government report on Thursday showed the number of Americans applying for unemployment benefits last week jumped by the most in five months but layoffs are low. Traders expect the Fed to raise its benchmark lending rate by an unusually large margin of 0.5 percentage points at its March 22 meeting. That is up from an expectation of 0.25 points before Powell's comments this week, according to CME Group.
As the song says 'we've only just begun'!