US stocks lose ground on news of Fed's plans to cut stimulus

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The Dow Jones index fell from a record high after the minutes from last month's meeting of the US Federal Reserve indicated a faster-than-predicted pull back of coronavirus stimulus.

The Dow Jones index has fallen back from another record high after the US central bank said it might need to raise interest rates sooner than expected and cut its bond holdings to curb inflation.At 7:10am AEDT, the Dow Jones index had fallen 0.6pc, to 36,590, the S&P 500 fell 1.2pc, to 4,734, while the Nasdaq Composite lost 2.5pc, to 15,243

Minutes from the Federal Reserve's December policy meeting outlined plans to start reducing the more than $US8 trillion in bonds it is holding. Last month, the Fed said it would end its pandemic-era bond-buying program in 2022 and it indicated there would be at least three interest rate rises for the year.

Technology giants once again took a hit with Apple, Alphabet, Amazon, Meta and Microsoft weighing on the market.Real estate stocks also fell because of the prospect of higher interest rates. In London, the FTSE 100 rose 0.2 per cent, to 7,517, the DAX in Germany rose 0.7 per cent, to 16,272, and the CAC 40 index rose 0.8 per cent, to 7,376.

 

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