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Nasdaq dives on Fed rate hike worries, rout in chipmakers

  • Q3 GDP Revised Up, Jobless Claims Revised Down Than View
  • Micron forecasts larger-than-expected second-quarter loss
  • AMC plunges on $110M equity raising
  • Index falls: Dow 1.50%, S&P 1.97%, Nasdaq 2.83%

Dec 22 (Reuters) – Fears that the U.S. Federal Reserve will stick to an aggressive tightening trajectory have grown, following a wave of new data showing a resilient economy. The Nasdaq index fell nearly 3% on Thursday. Micron’s gloomy predictions add to the gloomy mood.

Apple (AAPL.O), Microsoft (MSFT.O) and Amazon.com (AMZN.O) each fell more than 3%.

Electric car maker Tesla (TSLA.O) plunged 6.5% after doubling discount prices on models in the US this month on concerns about softening demand.

Among the 11 major sub-indices of the S&P 500 (.SPX), declines in interest rate-sensitive growth stocks led the technology (.SPLRCT) and consumer goods (.SPLRCD) sectors.

A final estimate of US gross domestic product for the third quarter revealed that the economy grew at an annualized rate of 3.2%, beating earlier estimates of 2.9%.

Meanwhile, the Labor Department reported that the number of Americans who filed for state unemployment benefits rose to 216,000 last week, well below economists’ estimates of 222,000, signaling a still tight labor market. is showing.

“The GDP data beat many expectations. There are concerns that the economy won’t give up easily, and there’s a likely battle that the Fed will need to stay hawkish and hold rates on hold for longer.” said Sam Stovall, chief investment strategist at CFRA Research in New York.

The Philadelphia SE Semiconductor Index (.SOX) also saw Micron Technology (MU.O), Nvidia (NVDA.O), Qualcomm (QCOM.O) and Advanced Micro Devices (AMD.O) rise from 4.4% to 7.4%. fell in between.

Fears of a recession following the U.S. Central Bank’s prolonged rate hikes have weighed heavily on equities this year, with the benchmark S&P 500 (.SPX) slipping 20% ​​annually, its worst performance since the 2008 financial crisis. set to fall.

Betting on a 25 basis point rate hike by the Fed to 4.5% to 4.75% in February was little changed at 71.4% following Thursday’s data, but the final rate forecast by May 2023 is up to 4.89%.

At 11:44 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 500.33 points (1.50%) to 32,876.15 and the S&P 500 (.SPX) fell 76.56 points (1.97%) to 3,801.88, with the Nasdaq Composite (.IXIC) fell 303.39 points (2.83%) to 10,405.98.

CarMax (KMX.N) fell 7.5% to the bottom of the S&P 500 after used-car retailers suspended share buybacks after quarterly earnings plunged 86%.

AMC Entertainment Holdings (AMC.N), the world’s largest movie theater chain, fell 13.6% after it announced it would raise $110 million through the sale of preferred shares.

Losers outnumbered gainers by a ratio of 5.42 to 1 on the NYSE and 2.86 to 1 on the Nasdaq.

The S&P index made one 52-week high and 15 new lows. Meanwhile, the Nasdaq posted his 57 new highs and his 303 new lows.

Reported by Shubham Batra, Amruta Khandekar, Ankika Biswas and Johann M Cherian of Bengaluru. Edited by Shounak Dasgupta and Anil D’Silva

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