U.S. stocks drop as Fed's hawkish drumbeat persists - BNN Bloomberg

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U.S. stocks dropped as fresh data painted a picture of an economy that can handle further Federal Reserve tightening, and concern about the global economy overshadowed the Bank of England’s move to restore calm.

The S&P 500 fell as much as 2.7 per cent after St. Louis Fed President James Bullard didn’t back down from his hawkish stance and said investors have now understood that they can’t escape additional rate hikes in coming months. Better-than-expected 2Q core PCE and personal consumption numbers on Thursday also paved the path for the central bank to stay aggressive. Weekly jobless claims fell to the lowest since April, showing a persistently tight labor market.

U.S. Treasuries trimmed Wednesday’s gains, with the 10-year yield climbing to around 3.79 per cent. U.K. gilt yields rose after Prime Minister Liz Truss’s defense of unfunded tax cuts that sent markets into turmoil failed to persuade investors. “The market is down coming to terms with the idea that a recession is almost a given at this point and it’s really making adjustments for that,” said Shawn Snyder, head of investment strategy at Citi U.S. Wealth Management. “You also have some turmoil going on in the United Kingdom, with the gilts taking a hit and currency tumbling due to the inflationary fiscal policy being projected there.

 

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U.S. stocks drop for sixth session as rate woes persist - BNN BloombergU.S. stocks ended a volatile session lower after a slew of Federal Reserve officials hammered home their resolve to remain aggressive in their fight against inflation.
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