Photo: Maxim Hopman
On Thursday, the US stock market experienced its worst quarter ever as fears about Ukraine continue to mount and worry over its impact on the economy piles up. The Federal Reserve has yet to arrive at any conclusions regarding additional easing measures.
Just as hopes for a potential peace negotiation between Ukraine and Russia started to grow, President Vladimir Putin issued a warning on Thursday that traders should stop trading with Europe if they want access to three-quarters of their gas supply in rubles only.
US counterpart Joe Biden rolled out the biggest release from the country’s emergency oil reserve and urged oil companies to increase drilling in an attempt to reduce gasoline prices that had skyrocketed at the beginning of the war between Russia and Ukraine.
The recent war between Russia and Ukraine has sent stock prices tumbling, with inflation on a steady rise. Already-elevated US inflation has increased with soaring product prices like oil and metals after the war broke out.
With the prices going higher each day, it is only a matter of time before inflation sets in. Consequently, the Fed has been very keen on raising interest rates to combat this growing economic concern, prospectively repressing economic growth.
The data displayed on Thursday indicates customer prices hardly increased in February as pricing tension escalated, with personal consumption expenditures (PCE) except food and energy soaring by 0.4%.
“The PCE number came out today, which is the Fed’s preferred number, and although that was right on target, it was higher than it was last month, and the sense is it is going to continue to go higher; therefore, you are seeing some weakness,” stated managing partner at Kace Capital Advisors in Boca Raton, Florida, Ken Polcari.
“This only solidifies (Fed Chair) Jay Powell and the Fed’s position to be more aggressive, so there are going to be multiple 50 basis point hikes.”
The Dow Jones Industrial Average dropped 550.46 points, or 1.56%, to 34,678.35, the S&P fell 72.04 points, or 1.57%, to 4,530.41, and the Nasdaq Composite lost 221.76 points, or 1.54%, to 14,220.52.
Opinions expressed by US Insider contributors are their own.