Source: Marketwatch.com
The Dow Jones was off 3.03% last night (New Zealand time) closing at 32,283.40.
Source: Marketwatch.com
Other stock-related US financial markets were also down. Oil rallied a little. Gold dropped but not by as much as the financial markets. Gold is a hedge against inflation and would be expected to fall if the US central bank is tackling price rises.
The drop in the US indices came after a speech by the US Federal Reserve Chairman, Jay Powell at Jackson Hole.
Although only paid a salary of a third (in US dollar terms) of the New Zealand Reserve Bank governor the chairman seems to have considerably more influence over the global financial markets.
Jackson Hole hosts the annual Jackson Hole Economic Symposium where bankers, central bankers and others from the financial sector meet to discuss the economy.
In his speech yesterday the chairman stated a willingness to tackle inflation and that he would be sacrificing some growth in the US economy doing so.
A year ago at the same symposium the chairman had said inflation was ‘transitory’. He said at that time that price rises were caused by supply chain problems.
He has now changed his view.
This Financial Times article covers his comments in more detail (although it might be paywalled for non-subscribers).