US stocks tumbled on Tuesday, a day ahead of an expected Federal Reserve rate hike. The Fed is expected to hike rates by at least 0.75% to dampen inflation, which has raised concerns among investors amid a possible recession.
The Dow Jones Industrial Average fell 313.45 points, or 1.01%, to 30,706.23. The S&P 500 fell 43.96 points, or 1.13%, to 3,855.93 and the Nasdaq Composite fell 109.97 points, or 0.95%, to 11,425.05.
Aside from a three-day rally earlier this month, stocks have generally traded lower in recent weeks. The Fed opened its two-day monetary policy meeting on Tuesday and the Federal Open Market Committee is expected to announce a rate hike on Wednesday.
Ford’s shares plummeted on Tuesday. It was the automaker’s worst day in more than a decade. The company had warned Wall Street that it had unexpectedly incurred $1 billion in supplier costs. Ford (F) shares fell $1.85, or 12.39%, to $13.08.
Meanwhile, shares of Carvana (CVNA) fell $2.48, or 7.41%, to $30.97 and shares of Etsy (ETSY) fell $7.81, or 6.99%, to $103.97.
Wall Street analysts are expecting a 0.75%, or 75 basis point, hike, but speculation of a 100 basis point hike fueled some of Tuesday’s selling. Some analysts said a 100 basis point hike would be too much.
“We believe a 100 basis point hike would unsettle Wall Street as it would mean the FOMC is overreacting to the data rather than sticking to its game plan and would increase the likelihood that the FOMC would eventually become too harsh and would reduce the possibility of achieving a soft landing,” said Sam Stovall, chief investment strategist at CFRA, in a note to clients.
https://www.ibtimes.com.au/stock-market-today-dow-drops-amid-expected-fed-rate-hike-ford-falls-over-12-1838570?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Dow falls amid expected Fed rate hike, Ford falls over 12%