NEW YORK — Stocks on Wall Street toppled Thursday following the newest suggestion that main banks now care more about combating inflation than propping up markets.
The S&P 500 sank 2.4%, putting it on track for its ninth losing week in the last10 The Dow Jones Industrial Average fell 1.9%, and the Nasdaq composite lost 2.7%.
Wall Street’s losses spedup as the closing bell for trading approached, with traders rushing to get in last moves ahead of a extremely preparedfor report on U.S. inflation due Friday earlymorning. The S&P 500’s drop more than doubled in the last hour of trading.
The weakpoint for markets began on the other side of the Atlantic after the European Central Bank stated it would raise interest rates next month for the veryfirst time in more than a years. Another walking is set for September, perhaps by double July’s boost, and the main bank will likewise stop its bond-buying program next month.
It all marks a “sea modification” in policy for the European Central Bank, according to Marilyn Watson, head of worldwide basic set earnings technique at BlackRock.
And it’s part of a growing international tide where main banks are gettingridof the ultra-low interest rates that were suggested to goose loaning, financial development and stock rates through the pandemic. Instead, they’ve swung their focus towards raising interest rates and making other moves to sluggish development in order to knock down high inflation.
The threat is that such moves might cause a economicdownturn if they’re too aggressive. Even if main banks can pull off the fragile balancing act and prevent a economiccrisis, greater interest rates put down pressure on stocks and all kinds of financialinvestments regardless.
The broad expectation is that