Wall Street sinks to lowest since Feb’21 on slowdown concerns

• PostFOMC rally fizzles
• US data mix compounds economic worries
• Tesla raises US prices

A post-FOMC rally did not last long. Indeed, it was very similar to May when investors welcomed interest rate hike with a rally only to change their minds few hours later. This has been exactly the case this time around. While the hawkish Fed was initially welcomed warmly, sentiment started to sour overnight only to tank after the SNB delivered a surprise interest rate increase (of 50bps) from a record low -0.75%.

The message for investors is clear – it’s the definitive end of free money era and that’s never good for stocks. What is even worse is that this global tightening (we also had hike in UK, Hong Kong and a surprise hike in Hungary today alone) seems to be gathering moment just as the economic data begins to show cracks. Today’s US package showed weaker housing market and activity in a contraction territory.

Furthermore, macro worries seem to be reflected in what companies are doing. Tesla (TSLA.US, TSLA.DE) has announced price increases of around 5% for the US market, citing higher costs and supply chain issues.

US500 has tumbled to the lowest since early 2021. The next major support is at around 3575.