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Tuesday November 29, 2022

US stocks fall as BoE follows Fed with big rate hike

The BoE says it was lifting borrowing costs by 0.75% percentage points to 3% in its biggest rate hike since 1989

By AFP
November 03, 2022
US stocks fall — AFP/file
 US stocks fall — AFP/file

NEW YORK: Wall Street stocks fell early Thursday after the Bank of England followed the US Federal Reserve in enacting a big interest rate hike to combat inflation.

The BoE said it was lifting borrowing costs by 0.75% percentage points to 3% in its biggest rate hike since 1989.

The move came after the Fed on Wednesday also enacted a rate hike of the same size as Chair Jerome Powell pledged continued action to combat inflation at a news conference that market watchers viewed as hawkish.

"The message from Fed Chair Powell yesterday was a downer for the stock market," said Briefing.com analyst Patrick O´Hare.

"Mr Powell said a lot, but the point that registered was his view that it is very premature to talk about pausing the rate hikes and that the Fed still has a ways to go to get the policy rate to a restrictive level" to bring inflation lower.

About 15 minutes into trading, the Dow Jones Industrial Average was down 0.7% at 31,919.59.

The broad-based S&P 500 shed 1.2% to 3,716.21, while the tech-rich Nasdaq Composite Index dropped 1.4% to 10,379.84.

Among individual companies, eBay shot up 7.1% as it reported better-than-expected results "in the face of a challenging macroeconomic environment."

But Kellogg fell 4.6% despite raising its full-year forecast as it pointed to strong sales in snacks globally and a "continued rebound" in North America cereal.