Stocks fell for a 3rd straight session and suffered a second straight week of losses on Friday as fears continued to mount that the Federal Reserve’s campaign to contain inflation would send the economy into recession.
The Dow fell 281.76 points, or 0.9%, to 32,920.46, the S&P 500 fell 1.1% and the Nasdaq fell 1%. The Dow Jones, which had fallen more than 500 points earlier, finished the week down 1.7%.
Investors are attempting to return to terms with recent comments by Fed Chairman Jerome Powell signaling further policy tightening and the central bank’s forecast that rates of interest will break above
Adding to the priority, Latest York Fed chairman John Williams said it was possible the central bank would raise rates of interest more than expected next 12 months. The politician added that he didn’t predict a recession on account of the Fed’s aggressive policy tightening.
As well as, Federal Reserve Bank of San Francisco president Mary Daly said it was “reasonable” to consider that after Fed rates hit their peak, they might stay there until 2024.
![Fed Chairman Jerome Powell](https://nypost.com/wp-content/uploads/sites/2/2022/12/fed-jerome-powell.jpg?w=1024)
“It looks as if the market is finally starting to know that bad news is bad news, and that is what is beginning to occur. Because the lows in October, the market has continued to cost in what I consider to be a major dose of optimism regarding the undeniable fact that the Fed can conduct and pilot a successful soft landing, said Dave Wagner, stock analyst and portfolio manager at Aptus Capital Advisors in Cincinnati.
“Finally, the market is taking into consideration that bad news should mean bad things for the market.”
Money market bets point to not less than two 25 basis point rate hikes next 12 months and a final rate of interest of around 4.9% by mid-year before dropping to around 4.4% by the top of 2023.
![Traders work on the trading floor of the New York Stock Exchange.](https://nypost.com/wp-content/uploads/sites/2/2022/12/dow-stocks-fed.jpg?w=1024)
The latest report showed that US business activity contracted even further in December as latest orders fell to their lowest level in only over 2.5 years, but weakening demand helped bring inflation down significantly.
“The speed at which the numbers are falling is a bit more worrying,” Pavlik added.
It comes after Thursday’s data showed weak US retail sales in November, despite the fact that the job market remained strong and the variety of Americans applying for unemployment advantages fell last week.
The tech-savvy Nasdaq closed below its 50-day moving average on Thursday, a key technical level seen as an indication of short-term momentum.
Market participants have largely ruled out the possibilities of a Santa Claus rally this 12 months due to restrictions from major hawkish central banks. The Bank of England and the European Central Bank were the last to point to an prolonged cycle of rate of interest hikes on Thursday.
The simultaneous expiration of stock options, stock index futures and index options later within the day, known as triple witching, could cause volatility during a trading session.
Meta Platforms jumped 2.8% after JP Morgan upgraded the stock to “chubby” from “neutral,” while Adobe gained 3% after the Photoshop maker forecasted first-quarter profit above expectations.