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New York stock market closed with decline

The New York stock market closed the last trading day of the week with a decline as the interest rate hikes by the central banks strengthened the recession concerns.

At the close, the Dow Jones index depreciated by nearly 300 points and decreased by 0.85 percent to 32,920.46 points.

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The S&P 500 index fell 1.12 percent to 3,852.14 points, and the Nasdaq index fell 0.97 percent to 10,705.41 points.

With the effect of increasing recession concerns, a negative trend was observed in the stock markets throughout the day.

After the US Federal Reserve (Fed), the European and British central banks maintained their “hawk” stance, although they reduced their tightening rates yesterday.

Analysts stated that recession concerns were strengthened as central banks signaled that they would continue to increase interest rates in the coming period.

 

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While following the statements of Fed officials, New York Fed President John Williams noted that the bank is likely to increase the interest rate more than anticipated. Williams stated that he does not expect interest rates to rise above 6 percent, adding that the US economy is not in recession and does not expect it to enter recession.

San Francisco Fed President Mary Daly also stated that the Fed is far from its price stability target, and there is still a long way to go. Daly said that it is reasonable to think that the Fed’s policy rate will stay at that level for about a year when it reaches its peak, and that it is ready to stay there longer if necessary.

Cleveland Fed President Loretta Mester said she expects the Fed to raise interest rates more than she anticipated. Noting that he expects to see volatility in inflation data, Mester said that it will take time for inflation to fall. Mester said the Fed will have to keep the interest rate above 5 percent next year.

On the macroeconomic data side, the Manufacturing Industry Purchasing Managers Index (PMI) in the USA decreased by 1.5 points to 46.2 in December, pointing to the biggest contraction in the manufacturing sector since May 2020.

Composite PMI covering the manufacturing and services sectors also decreased by 1.8 points month-on-month to 44.6 in December, indicating that the contraction in economic activity continued rapidly.

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