Wall Street is suffering as fears of a stock market crash in 2023 grow.
When most investors’ sentiment improved and rose slightly in the past few weeks, the Fed meeting on Wednesday changed the optimistic outlook to a more gloomy one. For the second day in a row, the U.S. stock market failed to post gains and took significant losses.
On Wednesday at the FED meeting, the chairman of the Federal Reserve killed any hope for any easing interest hikes, and therefore the fears of a recession grew and so did the market volatility.
By the end of Thursday’s trading day, most of the main indexes on Wall Street posted a decline of an average of 2%.
The S&P 500 fell by more than 2%, the Nasdaq feature declined by 2.14 percent, and the Dow Jones industrial average was the most damaged index, falling by more than 3%.
The Federal Reserve is moving to tackle inflation by remaining committed to its highly aggressive interest rate hikes. According to the FED meeting, the U.S. central banks will increase their interest rates by a half basis point.
On Friday morning, most of the high-value U.S. stocks experienced a sharp decline in their stock price. Apple shares fell by 1%, Tesla shares declined by 3.6 percent, and Alphabet A shares plummeted by 1.14%.
Still, Netflix and Meta stocks saved the tech stock from posting a record day of losses. Netflix shares rose by 0.5%, and meta shares soared by 3.6%.
Moving to Wall Street’s main indexes’ performance in Friday’s mid-trading hours, the S&P 500 index declined by 1.7%, moving to the worst holiday gains for this month. The Nasdaq feature fell by an estimated 4% in the past couple of days. The tech stock market’s volatility just skyrocketed, especially when the sector is already dealing with a sharp supply chain shortage and a weak labor market.
The increasing market volatility and borrowing costs have caused the Dow Jones Industrial Average to lose about 5% of its market value in the last trading hours.
Borrowing costs are already high, and the housing market is expected to decline by 10% by 2023.
Meanwhile, the U.S. dollar index posted some gains today, and the dollar index soared by 0.77 percent by the end of today’s trading hours.
Will the stock market crash in 2023?
Rising interest rates by half a basis point were expected due to the high inflation numbers. But what worries investors and the market is the fact that policymakers plan to stay on the same course in the next year, which is more than investors and the market can bear.
Economically speaking, rising interest rates are the only working strategy that helps tame inflation. However, his strategy will take the economy to the bottom, which must happen. However, long-term interest rate hikes carry serious consequences
If the Federal Reserve and its officials keep raising their interest rates at the current aggressive level, the market’s decision probabilities will hit a full percentage.