The soaring momentum of the US stock market hit a snag on Wednesday, halting the impressive gains it had been building over the past week.
The Dow Jones Industrial (^DJI) concluded the day 1.27% below its previous day’s close, followed by a 1.47% drop in the Nasdaq Composite (^IXIC) and a 1.4% decline in the S&P 500 (^GSPC). This sharp decline marked the most significant single-day drop since October. Prior to this setback, both the Dow Jones Industrial and Nasdaq had been on an unstoppable upward trajectory for nine consecutive days.
This sudden market downturn is attributed to investor apprehension stemming from hawkish remarks made by Federal Reserve officials. These comments tempered the anticipation among investors for a potential interest rate cut in 2024. Notably, before this downturn, the S&P had been nearing its all-time high that was recorded in January 2022, while the Dow Jones had notched its fifth record high close, indicating a robust rally heading into the year-end.
US stock market Investors are now closely monitoring the Federal Reserve’s future actions regarding interest rate cuts. The Fed’s decision hinges on forthcoming data, including Thursday’s GDP and unemployment claims figures, as well as Friday’s data on the core PCE price index. However, there are concerns that quicker and earlier rate cuts might inadvertently lead the US economy into a downturn.
Outside of the United States, noteworthy observations in economic recovery include the unexpected decline in inflation in the United Kingdom and a decrease in German wholesale inflation. The UK’s current inflation, at its lowest level in two years, provides a hopeful sign for the country’s economy.
Argenx SE (ARGX) suffered the most significant loss, dropping by 25.12% in its shares during Wednesday’s decline. Joining the top 5 losers alongside Argenx were Fluence Energy Inc. (FLNC), Immunovant Inc. (IMVT), DXC Technology Company (DXC), and FedEx Corporation(FDX).
