(Bloomberg) -- Stocks slumped in a session of wild gyrations as Jerome Powell continued to sound unequivocally hawkish as the Federal Reserve pushes ahead with it most-aggressive tightening campaign since the 1980s to thwart inflation.
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In a session of several ups and downs, the S&P 500 moved decidedly lower after the Fed’s boss said the central bank still has “some ways to go” in its policy cycle, adding that it’s very premature to think about pausing hikes as rates could peak at higher levels than previously thought. Equities briefly rose when he said that a slower pace of rate hikes could come as soon as December.
Tech shares underperformed, with giants like Apple Inc. and Tesla Inc. tumbling at least 3%. Two-year US yields -- which are more sensitive to imminent Fed moves -- reversed course and pushed higher.
“This is not an environment in which the Fed will pivot or signal a pivot,” said Ronald Temple, head of US equity at Lazard Asset Management. “To do so would be malpractice, and the Fed knows that. In December, the Fed will have two more inflation reports and two more jobs reports. Then, perhaps, the FOMC can signal a deceleration in tightening, but not before.”
The Federal Open Market Committee’s unanimous decision lifted the target for the benchmark federal funds rate by another 75 basis points to a range of 3.75% to 4%, its highest level since 2008.
Data Wednesday showed hiring at US companies rose in October by more than forecast, underscoring resilient labor demand despite the Fed’s efforts to cool the economy. A strong job market has fueled fast wage growth, contributing to rapid inflation and putting pressure on the Fed to aggressively tighten monetary policy.
The Treasury halted the longest string of cutbacks to its quarterly sales of longer-term debt in about eight years, showcasing the end of a period of historic reduction in the fiscal deficit.
In corporate news, Boeing Co.’s chief said the planemaker could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks and miscues. China has ordered a seven-day lockdown of the area around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.
Key events this week:
Bank of England rate decision, Thursday
US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
ECB President Christine Lagarde speaks, Thursday
US nonfarm payrolls, unemployment, Friday
Some of the main moves in markets:
Stocks
The S&P 500 fell 1.9% as of 3:27 p.m. New York time
The Nasdaq 100 fell 2.7%
The Dow Jones Industrial Average fell 1.1%
The MSCI World index fell 1.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.4% to $0.9833
The British pound fell 0.7% to $1.1408
The Japanese yen rose 0.3% to 147.84 per dollar
Cryptocurrencies
Bitcoin fell 1.2% to $20,225.8
Ether fell 2.7% to $1,532.5
Bonds
The yield on 10-year Treasuries advanced six basis points to 4.11%
Germany’s 10-year yield advanced one basis point to 2.14%
Britain’s 10-year yield declined seven basis points to 3.40%
Commodities
West Texas Intermediate crude rose 0.7% to $88.95 a barrel
Gold futures fell 0.6% to $1,639.40 an ounce
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