The Dow Jones Industrial Average closed lower Friday (Sept. 23) as investors continued to sell stocks amid recession fears. After the Federal Reserve (Fed) insisted on tightening monetary policy to curb inflation.
In addition, the release of the Purchasing Managers’ Index (PMI), which included the US manufacturing and primary services sectors, contracted for the third month, further dragging the market down.
The Dow Jones Industrial Average closed at 29,590.41, down 486.27, or -1.62%, the S&P500 closed at 3,693.23, down 64.76, or -1.72%, and the Nasdaq closed at 10,867.93, down 198.88, or -1.80%.
in this week The Dow was down 4 percent, the S&P500 was down 4.6% and the Nasdaq was down 5.1%.
All 11 stocks of the S&P 500 index closed in negative territory. It was led by the energy and luxury segments, which fell 6.75% and 2.29 percent respectively.
The Dow fell to its lowest level since November. 2020, after falling more than 800 intraday points and falling more than 20 percent from a record close of 36,799.65 on Jan. 4 that put the Dow into a doldrum.
Investors sell stocks to mitigate risk. because there is growing concern that The Fed’s aggressive monetary policy tightening will push the economy into recession.
The Fed raised interest rates by 0.75% on Wednesday (Sept. 21), for the third time in a row this year. This puts the Fed’s short-term interest rate in the range of 3-3.25% in an attempt to curb inflation.
Fed Chairman Jerome Powell reiterated that Fed aims at meeting price stability targets The Fed is expected to rely on continuous tightening of monetary policy. and will cause economic expansion to be below the trend and higher unemployment
investors expect The Fed will raise interest rates another 0.75% at its monetary policy meeting in November. and increased by 0.50% in December
In addition, the market was also pressured by the S & P. Global revealed that The Purchasing Managers Index (PMI) combines the primary US manufacturing and service sectors. It rose to 49.3 in September, the highest level in three months, from 44.6 in August.