NEW YORK, New York – Reality returned to Wall Street Thursday, a day after an explosive rally triggered by a half-percentage point increase in official interest rates.
The Fed move was tempered by remarks from Federal Reserve Governor Jerome Powell that more aggressive rate hikes may not be needed in the future.
“Yesterday’s explosion higher was completely comical. It was ridiculous. His comments did not justify the move that we saw,” Kenny Polcari, managing partner at Kace Capital Advisors told Reuters news agency Thursday.
“Part of what people are recognizing, very deep within his speech yesterday, is the concern that inflation is out of control, and the Fed is behind the eight ball. It is the concern that they may even have to make a more drastic move.”
The Nasdaq Composite led Thursday’s firesale, plummeting 647.16 points or 4.99 percent to 12,317.69.
The Dow Jones industrials dived 1,063.09 points or 3.12 percent to 32,997.97.
The Standard and Poor’s 500 shed 153.30 points or 2.56 percent to 4,146.87.
The U.S. dollar was steady Thursday. The euro fell from Wednesday’s +1.06 level to trade at 1.0550 around the New York close. The British pound tumbled to 1.2365. The Japanese yen weakened to 130.07. The Swiss franc was sharply lower at 0.9846.
The Canadian dollar was little changed at 1.2834. The Australian dollar dropped more than a cent and a half to 0.7113. The New Zealand dollar weakened to 0.6430.
On overseas equity markets, the Dax in Germany advanced 0.49 percent. The Paris-based CAC 40 added 0.43 percent. In London, the FTSE 100nedged up 0.13 percent.
The Australian All Ordinaries gained 74.40 points or 0.98 percent to 7,639.20.
In New Zealand, the S&P/NZX 50 advanced 72.36 points or 0.62 percent to 11,747.57.
China’s Shanghai Composite rose 20.70 points or 0.68 percent to 3,067.76.
In Hong Kong, the Hang Seng went against the trend, closing down 76.12 points or 0.36 percent at 20,793.40.
Japanese and South Korean markets were closed for public holidays.