U.S. stocks fell sharply on Thursday as investors reassessed the prior day’s rally and took in data showing increased sluggishness in the housing and manufacturing sector.
The Dow Jones Industrial Average fell below the 30,000 level first passed in November 2020, dropping by 750 points or 2.4 percent. The S&P 500 was off by 3.2 percent. The Nasdaq Composite declined four percent.
All 11 sectors of the S&P were down on Thursday. The Consumer Discretionary sector was the worst performing sector, led by a big decline in autos. Consumer Staples were the best performing sector, led by grocery stores.
Stocks soared Wednesday after the Federal Reserve raised its target rate by three-quarters of a percentage point and Fed chair Jerome Powell said in a press conference that such a big rate increase would not become the norm.
Although Fed officials reduced their projections for economic growth this year and next year, as well as the forecast for this year’s inflation, there was no hint that they see a recession looming. As well, the projections for interest rate hikes matched or fell slightly short of what the market was already expecting, relieving fears that the Fed might tighten even more in light of higher than expected inflation.”
On Thursday, the government released data showing that housing starts declined by more than expected. The Philadelphia Fed said on Wednesday that its index of the regional manufacturing sector fell into negative territory, indicating a contraction.
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