by Sinéad Carew and Sruthi Shankar
(Reuters) – The New York Stock Exchange ended sharply lower on Tuesday after Federal Reserve (Fed) Chairman Jerome Powell told the U.S. Congress that the central bank may have to raise interest rates more than expected in order to curb the still high inflation.
The Dow Jones Industrial Average fell 1.72 percent, or 574.98 points, to 32,856.46 points.
The broader S&P-500 lost 62.05 points, or 1.53%, to 3,986.37 points.
The Nasdaq Composite fell for its part by 145.40 points (1.25%) to 11,530.33 points.
In decline since the publication of the remarks prepared by Jerome Powell ahead of his hearing before a congressional committee, the main indices of Wall Street continued to retreat in the home stretch of the session.
The Fed is willing to adopt a more aggressive policy if economic data comes to suggest that tougher measures are needed to stem the price spike, the head of the US central bank said.
These were Jerome Powell’s first comments since data showed an unexpected acceleration in US inflation in January, while an unusually high rise in payroll employment was recorded in the first month. of the year.
As a result of the Fed chief’s statements, many traders bet on a 50 basis point rate hike at the central bank’s monetary policy meeting this month.
The yield on two-year US Treasuries, whose movements are closely linked to short-term interest rate expectations, crossed the 5% threshold for the first time since July 2007.
Jerome Powell is due to speak again on Wednesday before a committee of the House of Representatives.
All the major sectors of the S&P-500 ended the session down, led by the financial sector, which fell 2.5%.
Among the main moves on the stock side, Rivian Automotive declined 14.5% following the announcement of a bond issue of more than $1.3 billion to bolster its liquidity.
Tesla ended down 3% as its boss, Elon Musk, told investors it had a plan to produce a downsized vehicle model at half the cost of producing the Model 3.
(French version Jean Terzian)
©2023 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.