U.S. stocks plummeted on Friday as a result of a major selloff following the speech of Federal Reserve Chair Jerome Powell at the Jackson Hole economic symposium. Here, Powell reiterated the Federal Reserve’s commitment to combatting the ongoing inflation hike. He commented, “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.”
The Nasdaq index suffered the biggest losses of the day, sliding by 3.9%, while the S&P 500 declined by 3.3%, which were the largest drops for both indexes since June 13. The Dow Jones fell by 3%; its largest decline in four weeks.
Going forward, the Federal Reserve explained that it will be looking to implement policy decisions promptly on a meeting-by-meeting basis. This appears to be an essential move given the urgent nature of the situation, particularly with inflation remaining 4.6% above 2021 levels.
Not all economic data for the period appears bleak, however, as consumer prices fell slightly last month, with headline PCE dropping by 0.1% between June and July while energy prices decreased by 4.8%.