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S&P 500 Drops 2.5% As Traders Prepare For Hawkish Fed

Cory Russell

Oct 08, 2022 14:22


Stocks decline before the weekend

As a result of the better-than-expected Unemployment Rate news, which showed that the Unemployment Rate decreased from 3.7% in August to 3.5% in September, the S&P 500 is down 2.5%.

Stock prices will decrease as a result of the Fed's increased hawkishness as a result of the unexpected decline in the unemployment rate.

While the majority of market categories are now under significant pressure, energy stocks have been moving higher as WTI oil prices have risen. Leading oil companies including ConocoPhillips, APA Corporation, and Halliburton are up more than 3% today.

One of the poorest performing sectors right now is technology. AMD, which is down 11% after its preliminary third-quarter earnings underperformed analyst expectations, is leading the sell-off.

Additional export restrictions placed on by the U.S. today to cut China off from important chips have increased pressure on semiconductor stock prices. Monolithic Power Systems, ON Semiconductor, and NVIDIA are all down between 6 and 8%.

Because traders try to reduce their risks before the weekend, there is a widespread sell-off. Because of the positive employment market statistics, Treasury rates may soon reach annual highs, which would be negative for equities.

Traders have to keep an eye on what's happening in the markets for European government debt. Yields are increasing alarmingly quickly in Europe, which might eventually result in a debt catastrophe. The S&P 500 may hit new lows as a result of the strong currency and serious issues in the European economy, which will harm profitability for American multinational corporations.