WASHINGTON, DC - NOVEMBER 07: Federal Reserve Bank Chair Jerome Powell speaks at a news conference at the Federal Reserves William McChesney Martin building on November 7, 2024 in Washington, DC. NEW YORK — U.S. stocks tumbled to one of their worst days of the year after the Federal Reserve hinted Wednesday itThe S&P 500 fell 2.9%, just shy of its biggest loss for the year, to pull further from itsset a couple weeks ago. The Dow Jones Industrial Average lost 1,123 points, or 2.
While lower rates can goose the economy by making it cheaper to borrow and boosting prices for investments, they can also offer more fuel for inflation.Powell said some Fed officials, but not all, are also already trying to incorporate uncertainties inherent in a new administration coming into the White House. Worries are rising on Wall Street that“When the path is uncertain, you go a little slower,” Powell said.
On Wall Street, stocks of companies that can feel the most pressure from higher interest rates fell to some of the worst losses.Stocks of smaller companies did particularly poorly, for example. Many need to borrow to fuel their growth, meaning they can feel more pain when having to pay higher interest rates for loans. The Russell 2000 index of small-cap stocks tumbled 4.4%.
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