US stocks fell on Thursday after a strong start, while the dollar rose as investors braced for further Federal Reserve rate hikes.
All three major U.S. market indexes finished down, having been whipsawed by uncertainty in previous days, characterised by broad changes and increased volatility. The Dow Jones Industrial Average dropped 0.02 percent, the S&P 500 dropped 0.54 percent, and the Nasdaq Composite dropped 1.4 percent.
The MSCI world equity index, which includes equities from 45 countries, declined 0.94 percent.
Markets opened higher after new data showed that the United States’ economy accelerated in the fourth quarter, growing 6.9 percent – the fastest rate since 1984.
However, as has been the case for the majority of the week, gains were trimmed as investors considered how robust economic growth would influence the Fed’s thinking. Chairman Jerome Powell said at a news conference on Wednesday that inflation remained higher than the central bank would like and that supply chain difficulties could endure.
The expectation of faster or higher interest rate hikes in the United States, on the other hand, pushed the dollar to its highest level since July 2020.
The Fed suggested in its most recent policy statement on Wednesday that it was likely to raise rates in March, as generally expected, and confirmed plans to finish its pandemic-era bond purchases that month before beginning a large reduction in its asset holdings.
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