NEW YORK, Aug 27 — Wall Street slumped on Friday to close well down, as investors keen for a more modest interest rate path were disappointed by Federal Reserve Chief Jerome Powell signaling the central bank would keep hiking rates to tame inflation.
Investors knew further rate rises were coming, and they have been divided between whether a 75-basis-point and a 50-basis-point hike by the Fed was coming next month. “That’s the nuance they are trying to push forward and Powell was, maybe, a bit more explicit in that today. But if you’ve listened to other Fed speakers in the last couple of weeks, it’s the same message.” All the 11 major S&P 500 sectors were lower, with the information technology .SPLRCT, communication services .SPLRCL and consumer discretionary .SPLRCD indexes among the heaviest declines.
Having led gainers in the previous session, Nvidia Corp NVDA.O and Amazon.com Inc AMZN.O fell. Meanwhile, Google-parent Alphabet Inc GOOGL.O, Meta Platforms Inc META.O, and Block Inc SQ.N also dipped.