Across the Atlantic stocks closed lower, and tech companies set the tone for the trend on a day when there were new signs of a Fed rate hike imminent.
The Dow Jones industrial index fell 0.49% to 36,113.62 points. On January 5 last year, it reached a level that was not there before, at 36,952.65 points.
Standard & Poor’s 500, in turn, fell 1.42% to 4659.03 points. In intraday trading on January 4, it reached its highest value ever – 4818.62 points.
For its part, the Nasdaq Composite Technology Index lost 2.51% to 14,806.81. Recall that on November 22 it reached a historical maximum of 16,212.23 points.
Technology companies lost the most positions under the pressure of a new signal in favor of an interest rate hike in the near future.
U.S. Federal Reserve Second Representative Lael Brainard assured this Thursday that the central bank is ready to interest rate hike in Marchif the measure is necessary to fight inflation.
“[A Fed] several increases are forecast throughout the year,” Brainard explained, answering a question during his confirmation hearing with the Senate Banking Committee. a gradual reduction in asset purchases (downsizing), which is expected to end in March.
This position is in line with what I said Fed President last Tuesday before the Senate. Jerome Powell said at his confirmation hearing that the Federal Reserve will be able to bring down inflation as the US economy recovers.
Powell also signaled that the central bank should start cutting its balance sheet this year, which was already implied last week. When will the protocol be released? last Fed meeting on monetary policy.
The Fed chairman went on to say that he would not hesitate to take action if needed to contain price pressures. “If over time we have to raise interest rates more often, we will do so,” he stressed.
This monetary tightening by the central bank has led to higher interest rates on U.S. sovereign debt, essentially hurting tech companies that are trading at high prices after a sharp rise over the past two years, mostly thanks to low interest rates.
The other side of Joe Biden
Investors also digested the decision of the US Supreme Court, which was reported in the afternoon, rejecting a measure proposed by President Joe Biden to vaccinate more people.
Under his proposal, called “vaccination or test,” employees of large companies would be required to show a vaccination certificate to return to full-time work, or otherwise present negative tests.
This will result in 80 million workers being vaccinated or having to undergo periodic tests, which the Supreme Court has now blocked.
Citigroup has already threatened layoffs
At Biden’s suggestion, Citigroup had already announced late last week that it was laying off unvaccinated employees. On January 7, the US bank told its employees that it would terminate contracts with anyone who was not vaccinated by January 14.
Citigroup said it is strengthening its stance on covid-19 vaccinations at a time when the US is facing a new rise in infections. In a bank memo that Bloomberg had access to, Citi told its employees they must be vaccinated or they would lose their jobs.
Anyone who refuses to be vaccinated before January 14 will be placed on unpaid leave, with the end of the month coinciding with their last days as bank employees, according to a message sent to all employees. A source close to the lawsuit also confirmed to Reuters this deadline set by the bank.
In late October last year, Citi asked its employees to submit a vaccination certificate by December 8, adding that whoever gets vaccinated will receive a $200 bonus. At the time, the bank had already set a January 14 deadline. This measure is known as “no jab, no work” (no shots, no work).
Another source told Bloomberg that more than 90% of bank employees have met this requirement to vaccinate workers in the US, which also gives them the opportunity to apply for an exemption from vaccination for religious or medical reasons.
Some of Wall Street’s biggest financial institutions, such as JPMorgan Chase and Goldman Sachs, have already introduced this vaccination requirement, but allow their employees to get vaccinated if they don’t go to work.
Many companies have been waiting for the U.S. Supreme Court’s decision on whether the Biden administration’s ruling – in the sense that the country’s largest companies are demanding vaccines or weekly coronavirus tests – would be constitutional. But today it was decided no.