Analysis: Bruised Wall Street faces gauntlet of worries after market tumble

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Hawkish Fed policy, bond yields, geopolitical uncertainty and corporate earnings are fueling investor unease.

Traders work on the floor of the New York Stock Exchange in New York City, U.S., April 14, 2022. REUTERS/Brendan McDermidNEW YORK, April 24 - Battered U.S. stocks are facing a potentially painful stretch in the weeks ahead, as hawkish Federal Reserve policy, rising bond yields, geopolitical uncertainty and the corporate earnings season fuel investor unease.

Chief among market participants' worries is a Fed that has repeatedly ratcheted up its hawkish rhetoric as it gears up to fight the worst U.S. inflation in nearly 40 years. “The stock market is coming to grips with the reality that the Fed is serious about raising rates this time," said David Carter, managing director at Wealthspire Advisors. "It now expects large and quick increases and is having a difficult time digesting that.”

Rising Treasury yields have added to pressure on stocks and other risky assets. Real yields – which account for projected inflation – climbed into positive territory last week for the first time since March 2020, dulling the allure of equities in comparison to risk-free U.S. government bonds.Plenty of investors believe the economy – and markets – can remain resilient. Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management, said the U.S.

 

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