Wall Street tumbles, investors fret over Fed’s path to rate cuts!

Wall Street tumbles, investors fret over Fed’s path to rate cuts

Last Friday, U.S. stocks stumbled as the post-election rally lost steam and investors worried about the Federal Reserve’s path to rate cuts.?

“After the sugar hit of Trump’s election and its subsequent impacts on expectations for company profits, the market’s enthusiasm is being watered-down by greater interest rate uncertainty, especially going into next year,” Kyle Rodda, senior analyst at Capital.com told Reuters.

At the same time, Fed chair Jerome Powell remarked on Thursday that the central bank is in no rush to slash rates. “The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.” Inflation is still “on a sustainable path to 2%” to let the Fed shift monetary policy “over time to a more neutral setting,” he said.?

Wall Street slumped on the week. The Dow slipped 1.23% to 43,444.99 and the S&P fell 2.08% to 5,870.62. The Nasdaq dropped 3.14% to 18,680.12 as tech heavyweights —from chip giant Nvidia to Microsoft, Meta and Alphabet — all tumbled.?

BlackRock’s Kristy Akullian, head of iShares investment strategy, told CNBC that “while we think the macro backdrop still bodes well for risk assets, in the near term we should expect some micro volatility, particularly around potential policy shifts under a new administration. We expect the U.S. equity market to continue to move higher, but don’t expect that rise to happen in a straight line.”

WTI and Brent crude sank 4.77% and 3.83% to $67.02 and $71.04 a barrel, respectively, on the week. Gold fell 4.62% to $2,570.10 an ounce.?

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