NEW YORK, New York -- Fears of interest rate hikes in the coming weeks and months will be more aggressive than previously thought, which has led to global equity markets falling sharply on Friday.
Oil prices fell while the U.S. dollar went up.
U.S. Federal ReserveFederal Reserve Chairman Jerome Powell sparked a frenzy on Thursday after he commented that a 50 basis point official interest rate hike could be on the agenda when the monetary committee meets next month.
In recent weeks, there has been growing chatter that the Fed might look to ramp up the rate it will be tightening its policy, and the update from Jerome Powell made it very clear that will happen. David Madden, market analyst at Equiti Capital, told Reuters on Friday that good communication skills are crucial in this situation, and Mr. Powell gave a very clear signal that there will be a 0.5% hike next month.
The Dow Jones index fell by 981.36 points or 2.88 percent Friday to 33,811. The Nasdaq Composite fell 335.36 points or 2.55 percent to 12,839. The Standard and Poor's 500 declined 185.85 points or 2.77 percent to 4,271. The dollar made a lot of gains on foreign exchange markets. The euro fell to 1.0794 by New York on Friday. The British pound was close to the end of the day, at 1.2833. The Japanese yen dropped to 128.54 on the back of a slide of 128.54. The Swiss franc dropped to 0.9568.
The previously high-flying Australian dollar plunged to 0.7244. The New Zealand dollar was sold to 0.6637.
The Dax in Germany fell 2.48 percent on overseas markets. The CAC 40 in Paris, France dived 1.99 percent. The FTSE 100 fell 1.39 percent in London.
In Japan, the Nikkei 225 fell 447.80 points or 1.63 percent to 27,105. The Australian All Ordinaries lost 118.90 points or 1.51 percent to 7,768. In New Zealand, the S&P NZX 50 fell 45.60 points or 0.38 percent to 11,908. The Shanghai Composite was steady, moving up 7.11 points or 0.23 percent to close Friday at 3,086. The Hang Seng in Hong Kong declined 43.70 points or 0.21 percent to close Friday at 20,638.