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U.S. stocks fell for a second consecutive day after a Federal Reserve official signaled more interest rate hikes are likely to get inflation under control.
The Dow Jones Industrial Average fell 6.46 points, or 0.02%, to close at 33,547.37. The S&P 500 fell 11.93 points, or 0.30%, to close at 3,946.86, and the Nasdaq Composite fell 38.70 points, or 0.35%, to close at 11,144.96.
In separate appearances, two Federal Reserve presidents indicated Thursday that more rate hikes were on the way.
St. Louis Federal Reserve President James Bullard said in a speech Thursday that “the policy rate is not yet in a zone that may be considered sufficiently restrictive.”
The Federal Reserve has increased interest rates an unprecedented seven times this year. More increases in 2023 are likely, officials said, even if that means helping to push the economy into recession.
“I’m looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there,” said Kansas City Fed President Esther George to the Wall Street Journal on Wednesday.
Some of the other stocks that fell Thursday included Meta Platforms (META), which closed at $111.45, down $1.78, or 1.57%. Tesla‘s (TSLA) price of shares fell $3.75, or 2.01%, to close at $183.17.
“Additional monetary tightening and the cumulative impact of this year’s rate hikes suggest recession risks remain elevated,” wrote Mark Haefele, UBS Global Wealth Management chief investment officer, in a note to clients. “We continue to believe that the macroeconomic preconditions for a sustainable rally—that interest rate cuts and a trough in growth and corporate earnings are on the horizon—are not yet in place.”
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