An Ugly Day on Wall Street

UPDATE Dec 15, 2022 3:04 PM CST

Ouch. The markets cratered at Thursday's opening bell and never recovered. A weak report on retail sales and worries that the Fed will keep raising rates were getting the bulk of the blame. For the day, the Dow fell 764 points, or 2.2%, to 33,202; the S&P 500 fell 99 points, or 2.4%, to 3,895; and the Nasdaq fell 360 points, or 3.2%, to 10,810, per MarketWatch.

Dec 15, 2022 10:35 AM CST

Wall Street was having a painful morning on Thursday, thanks largely to two factors: a disappointing report on retail sales and fallout from the Fed's decision to raise rates again, reports CNBC and the Wall Street Journal. Two hours after the opening bell, the Dow was down more than 700 points, or 2.2%, while the benchmark S&P 500 was down 2.5% and the tech-heavy Nasdaq 3%. The declines came after the Commerce Department reported that retail sales fell 0.6% in November, worse than expectations of 0.3%, a sign that inflation continues to loom large.

"There's not a lot of strength in this report," says Ted Rossman of Bankrate, per CNN. "Nine of 13 categories fell on a month-over-month basis, and big-ticket purchases look especially shaky." Slumping auto sales played a particularly big role. In addition to the retail report, investors are worried that the Fed plans to continue raising rates well into next year. While the central bank raised its key interest rate by "only" half a percentage point on Wednesday, down from previous hikes of 0.75%, Fed chief Jerome Powell dashed investors' hopes that the increases would end in the near future.

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"What we learned yesterday is that they are planning to hold for longer than we thought," Hani Redha of PineBridge Investments tells the Journal. "The message becomes don't expect any monetary relief any time soon, even if the inflation numbers continue to decline." Investors' paramount fear is that the relentless rate increases will tip the US economy into a recession. (More economy stories.)