Strange stock market collapse with rising US interest rates

The Asian and US stock markets began to fall after the US Federal Reserve announced an interest rate hike, according to TradeNews. This rate of interest rate increase in the last 22 years was unprecedented. Concerns about the impact of rising prices and the impact of the Federal Reserve’s measures to control those prices on economic growth caused the stock market to fall.

Quoted from BBCNew York Stock Exchange began falling on Friday. Major stock indices in Hong Kong, China and Australia then fell. The downturn started with technology stocks.

Hong Kong’s main index was 3.8 percent in Hong Kong and 2.2 percent in Shanghai and Australia. The Dow Index, which includes shares of major companies such as Apple and Nike, fell more than 1,000 units and fell 3.1 percent. The SANDPI index also fell 3.6 percent and the Nezdak index fell 5 percent. The market grew well on Wednesday, but was offset by the Federal Reserve announcing a 0.5 percent increase in interest rates on Friday. The interest rate is currently between 0.75% and 1%.

The move, which increases the cost of borrowing, was to be expected. Some analysts say investors are happy that interest rates have not risen further.

But falling stock markets show that there are still concerns about the Fed’s ability to control the economy. The main reason for concern is that the Federal Reserve can slow down economic activity enough to control rising prices without causing a recession. This state of shrinking economy is called the US economy, which should be in this state for six consecutive months. In addition to rising interest rates, rising prices will also be affected by the Ukraine war and rising energy prices.

Does the US economy have the power to adjust to this interest rate?

The head of the US Federal Reserve, Paul Jerome, had said that the US economy was strong enough to accept rising interest rates. Investors, meanwhile, are worried about rising costs of living and its impact on households and declining purchasing power.

In recent weeks, large corporations such as Amazon have warned of slow growth. Government statistics for the month showed that the US economy contracted 1.4 percent in the first three months of the year. Shares of companies that rely on consumer spending were severely damaged on Thursday. Nike, for example, fell 5.9 percent, Apple 5.5 percent and Home Depot 5.1 percent. EBay fell more than 11 percent and ETS almost 17 percent. Both companies announced their growth the day before.

The only stock that grew well was Twitter, which grew 2.5 percent. Ilan Musk had asked investors to help him buy Twitter. But Tesla shares fell 8 percent.

Major US stock market indices have fallen since the beginning of this year. The Dow fell 10 percent, the Sondpi fell 13 percent and the Nezdak fell 22 percent.