NATIONAL NEWS

Dow falls nearly 1,000 points on rate hike fears and poor earnings from Verizon

Apr 22, 2022, 2:41 PM | Updated: Jun 8, 2022, 3:16 pm
FILE (Photo by Spencer Platt/Getty Images)...
FILE (Photo by Spencer Platt/Getty Images)
(Photo by Spencer Platt/Getty Images)

New York (CNN Business) — The Dow Jones fell about 980 points, or 2.8%, following comments about likely aggressive interest rate hikes from Federal Reserve chairman Jerome Powell. A poor earnings outlook from Dow component Verizon didn’t help matters.

All 30 stocks in the Dow ended the day lower, led by Verizon (VZ), which fell more than 5.5%, and Caterpillar (CAT), which plunged 6.5%. Dow component American Express (AXP) was off nearly 3% in response to its latest earnings. Stocks finished near their lows of the day. The Dow was down as much as 1,019 points heading into the close.

The S&P 500 and Nasdaq each dropped more than 2.5%, too. All three indexes were in the red for the week, with the Nasdaq sliding almost 4% in the past five days. The Dow has now fallen for four straight weeks while the S&P 500 and Nasdaq have declined for the past three weeks.

Powell confirmed what many bond investors already suspected, that a half-point interest rate hike is “on the table” for the Fed’s next meeting in May.

The yield on the 10-year Treasury bond has spiked to 2.9% in recent days, the highest level since December 2018. Stock traders seem to be worried that even more aggressive rate hikes are in the cards beyond May.

Federal funds futures on the CME are indicating that the market is now pricing in a more than 90% chance of a three-quarter percentage point hike at the June meeting. That would bring rates, which were at zero just two months ago, to 1.5%. Rates haven’t been raised that sharply since November 1994.

The Fed is hoping that the rate hikes will put an end to runaway inflation. Economists and investors are concerned that surging interest rates will slow the housing market and consumer spending, and usher in a recession.

Some experts think that worries about the Fed going too far are overblown.

“Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve,” said Jamie Cox, managing partner for Harris Financial Group, in an email. “It’s madness really. Most investors would be well served to ignore the machinations of the pricing craziness and wait to see what actually happens with rates.”

The CNN Business Fear & Greed Index, which measures seven indicators of market sentiment, fell into Fear mode Friday.

“Fed worries and disappointing earnings are a lethal combination given how tenuous market sentiment is at the moment,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management.

 

KSL 5 TV Live

Top Stories

National News

FILE PHOTO (Deseret News)...
Rio Yamat, Associated Press

‘Dances With Wolves’ actor arrested in Nevada sex abuse case

Las Vegas police have arrested former actor Nathan Chasing Horse at his home after uncovering what they describe as two decades of sexual assault and human trafficking allegations.
1 day ago
A man accused of kidnapping and torturing a woman in southwest Oregon knew his victim before the at...
Lucy Kafanov, Elizabeth Wolfe and Jeremy Harlan

Man accused of severely beating, kidnapping Oregon woman knew his victim, police say

A man accused of kidnapping and torturing a woman in southwest Oregon knew his victim before the attack, police tell CNN, as the week-long search for the suspect continues.
1 day ago
Artic weather leads to canceled flights...
Lilit Marcus, CNN

More than 1,800 flights canceled Tuesday, hundreds more on Wednesday

More than 1,800 flights were canceled and many more were delayed on Tuesday as a brutal ice storm continued to hit parts of the South and central United States, bringing a second day of transport problems.
1 day ago
The booking photo for Aaron Michael Zeman, also known as Tadashi Kura Kojima. ( Hall County Departm...
Michael Houck

Layton Amber Alert suspect charged with kidnapping, sexual exploitation of a minor

The Arizona man who is suspected of kidnapping a Layton boy has been charged with multiple felonies Tuesday. 
1 day ago
Priscilla Presley speaks at the public memorial for Lisa Marie Presley at Graceland on January 22, ...
Andrew Dalton, Associated Press

Priscilla Presley disputes trust of late Lisa Marie Presley

Priscilla Presley has filed legal documents disputing who oversees the estate of her late daughter Lisa Marie Presley.
1 day ago
This photo provided by the Dallas Zoo shows an emperor tamarins that lives at the zoo. Two monkeys ...
Andi Babineau and Elizabeth Wolfe

After monkeys stolen and animals enclosures cut open, Dallas Zoo releases photo of suspect

For the fourth time this month, the Dallas Zoo finds tampering with their animals and their enclosures, including one dead bird.
1 day ago

Sponsored Articles

Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t Let a Ransomware Attack Get You Down | Protect Your Workplace Today with Cyber Insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Dow falls nearly 1,000 points on rate hike fears and poor earnings from Verizon