US stock market opens lower as rate hike triggers recession fears

By Ovunc Kutlu

ISTANBUL (AA) - Major US stock market indices opened lower on Friday, as the Federal Reserve's rate hike and hawkish comments from Fed Chair Jerome Powell have raised fears of a recession in the American economy.

The Dow Jones Industrial Average lost 232 points, or 0.7%, to 32,970 at 9.40 a.m. EDT (1440GMT). The S&P 500 shed 29 points, or 0.77%, to 3,865.

The tech-heavy Nasdaq declined 36 points, or 0.33%, to 10,773.

All three indexes on Thursday posted their worst daily performance in three months.

The Fed on Wednesday, as expected, raised its benchmark interest rate by 50 basis points in its fight against record inflation, carrying the target range for the federal funds rate to between 4.25% and 4.5% – its highest in 15 years.

Powell said in his post-meeting press conference that history cautions against prematurely loosening monetary policy, adding: "We will stay on course (to lower inflation) until the job is done."

"It is not important how fast we go. It is far more important to think what is the ultimate level," he said, keeping the door open for more rate hikes next year.

The VIX volatility index, also known as the fear index, rose 1% to 23.06. The 10-year US Treasury yield increased 2.8% to 3.548%.

The dollar index was flat at 104.56, while the euro added 0.03% to $1.0629 against the greenback.

Precious metals were mixed. The price of gold rose 0.4% to $1,784 per ounce, but silver lost 0.1% to $23.08.

Crude oil prices were down almost 3%. Global benchmark Brent crude was trading at $78.89 per barrel for a decrease of 2.8%. US benchmark West Texas Intermediate crude was around $73.91 – down 2.9%.