The forthcoming rate hikes by the Fed are likely to be higher than previously expected. The corresponding announcement by Fed Chairman Powell was not well received on Wall Street, the most important indices closed with significant losses. However, the downturn of the electric car manufacturer Rivian has nothing to do with interest rate fears.
Testimonies by Federal Reserve Chairman Jerome Powell before the Senate Banking Committee are troubling Wall Street. The Dow Jones index of standard values closed 1.7 percent lower on Tuesday at 32,856 points. The tech-heavy Nasdaq fell 1.3 percent to 11,530 points. The broad S
The recent strong economic data suggested that the final level of interest rates is likely to be higher than previously expected, the Fed chairman said, according to the speech transcript. "Powell is repeating what we already know, but he's not saying anything to calm markets, and investors are a little nervous about the Fed's next move, how many rate hikes are coming and how long rates will stay high," Robert said Pavlik, portfolio manager at wealth manager Dakota Wealth. Powell was specifically concerned about the better-than-expected US jobs report for January, said Konstantin Oldenburger, an analyst at broker CMC Markets. This indicates that inflation could remain higher than originally expected in the coming months. "This guarantees even more excitement for the next labor market report on Friday," said Oldenbuerger.
On a stand-alone basis, Rivian Automotive's $1.3 billion convertible bond announcement didn't sit well with investors. The shares of the US electric car maker lost more than 14 percent to a record low of $ 14.64. On the other hand, an optimistic forecast for the year drove the shares of the US sporting goods manufacturer Dick's. The stock gained more than 11 percent to a record high of $146.79.
The prospect of a ban on foreign rivals like Chinese video platform TikTok continued to boost Snap's stock. The title of the operator of the instant messaging service Snapchat has meanwhile gained up to 8.7 percent to $12.67. In the end there was still a plus of 0.5 percent. A bipartisan group of 12 US senators will introduce the relevant bill on Tuesday, Senator Mark Warner said. This should give Minister of Commerce Gina Raimondo the opportunity to ban foreign technologies that pose a threat to national security.
The Weight Watchers diet group WW International gained 79 percent to $ 6.93 after taking over the telemedicine platform Sequence - its highest price level in almost six months. With the acquisition, the provider of nutrition programs for weight loss enters the business with prescription drugs for obesity.
