NEW YORK (AFP) – Weakening tech shares led a retreat in US equities on Thursday (Dec 16), with major indices closing lower and undercutting the prior day’s rally sparked by the Federal Reserve’s renewed inflation-fighting efforts.
Investors also had to digest a flurry of other central bank announcements including the Bank of England’s rate increase and the European Central Bank’s decision to follow the Fed down the taper path and end its stimulus asset-purchase programme.
The moves highlighted the growing concern among policymakers about price increases in major economies, but did not assuage markets’ fears that central banks may have moved too late.
“It is still astonishing that (Fed chairman Jerome) Powell did not notice that inflation was not transitory until November, when it had been a topic in every conversation since the spring,” said Gregori Volokhine of Meeschaert Financial Services.
The tech-rich Nasdaq Composite Index dropped 2.5 per cent to finish the day at 15,180.43.
The benchmark Dow Jones Industrial Average dipped 0.1 per cent to end at 35,897.64, while the broad-based S&P 500 fell 0.9 per cent to 4,668.67.
In the tech world, Adobe fell 10 per cent after announcing a disappointing sales outlook.
McDonald’s was up 0.4 per cent after announcing a settlement in the lawsuit against former CEO Steve Easterbrook, which claws back US$105 million (S$140 million) of his severance package and secures an apology for his actions over his inappropriate sexual relationships with employees.