S&P 500, Nasdaq 100 Snap Longest Winning Streak In 2 Years As Fed's Powell Chills Markets

by Piero Cingari Benzinga Staff Writer

Zinger Key Points

The US stock market's impressive winning streak, the longest in two years, ends as Powell warns of prolonged disinflation journey.
Bonds fell even more, as yields surge across the curve. The 30-year Treasury yields added 16 basis points in a session.
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After eight consecutive green closes for the S&P 500 and nine for the Nasdaq 100, the U.S. stock market’s impressive winning streak, the longest in two years, came to an end.

This setback was prompted by an unexpected hawkish intervention from Jerome Powell during a policy discussion hosted by the International Monetary Fund. The Fed Chair stated that despite progress on the inflation front, there is still a substantial distance to cover to achieve the 2% target.

Thursday’s session on Wall Street session had commenced with uncertainty, following remarks by another Fed speaker, Richmond Fed’s Thomas Barkin, who hinted at the necessity of an economic slowdown to win the war against inflation.

Investors revised rate probabilities for 2024, pushing forward the beginning of the Fed’s policy shift from May to June and lowering the cumulative extent of rate cuts next year.

Chart of The Day: Fed Chair Powell’s Speech Triggers Market Turbulence

Markets At The Closing Bell:

The SPDR S&P 500 ETF Trust SPY closed 0.8% lower on Thursday, marking its worst session since Oct. 26.
The tech-heavy Invesco QQQ Trust QQQ also ended 0.8% weaker.
Blue chips followed suit, with the Dow Jones Industrial Average ETF DIA down 0.7%.
Small caps underperformed, with the iShares Russell 2000 ETF IWM falling 1.6%.
Notably, no sector registered gains, with the Health Care Select Sector SPDR Fund XLV and the Consumer Discretionary Select Sector SPDR Fund XLY being the weakest performers, down by 2% and 1.8%, respectively.
The CBOE Volatility Index, or VIX, surged 6.8%.
Among mega-cap stocks, Walt Disney Co. DIS was the best performer, up 6.9%, Tesla Inc. TSLA the worst, down 5.5%.
Bonds experienced a more significant selloff than equities as yields rocketed across the Treasury curve. Thirty-year yields rose by 16 basis points to 4.78%. The iShares 20+ Year Treasury Bond ETF TLT closed 2.4% lower.
The US Dollar Index (DXY) strengthened by 0.4%. Interestingly, gold managed to close 0.4% higher.
Bitcoin showed a 2.6% increase, reaching $36,582 at the New York closing bell, following a volatile session that saw the cryptocurrency surging as high as $38,000.