Dow Jones Industrial Average experienced its largest weekly drop this year as investors fear that the US Federal Reserve (Fed) may raise interest rates more aggressively. The Fed revealed that the price index for personal consumption expenditure (PCE) rose more than expected, which led to a rebound in US government bond yields and a stronger dollar.
These developments have caused some investors to expect that the Fed will raise interest rates longer than expected.
- The Dow Jones Industrial Average closed at 32,816.92 points, down 336.99 points or -1.02%.
- The S&P500 closed at 3,970.04, down 42.28 points, or -1.05%.
- The Nasdaq also experienced a decline, closing at 11,394.94, down 195.46 or -1.69%.
Meanwhile, crude futures closed higher on Friday, February 24, due to expectations that Russia will cut oil production and exports next month.
- WTI crude futures rose 93 cents, or 1.23%, to settle at $76.32 a barrel, but were down 0.3% over the past week.
- BRENT crude futures rose 95 cents, or 1.16%, to settle at $83.16 a barrel, and were up 0.2% over the past week.
However, gold futures closed lower on Friday, pressured by a strong dollar and the rebound in US government bond yields. The US dollar gained sharply against a basket of major currencies following the release of the PCE price index.
- The gold futures were down $9.70, or 0.53%, at $1,817.10/ounce.
- Silver futures fell 49.60 cents, or 2.33%, to close at $20.81 an ounce.
- Platinum futures fell $37.60, or 3.98%, to settle at $907.90 an ounce.
- Palladium futures fell $51.30, or 3.6%, to settle at $1,377.30 an ounce.
The US dollar gained sharply against a basket of major currencies following the release of the Personal Consumption Expenditure (PCE) price index that rose more than expected. This might be a factor supporting interest rate hikes by the Federal Reserve (Fed).
- The dollar index was up 0.6% at 105.2157.
- The dollar was stronger against the yen at 136.39 yen from 134.64 yen.
- The dollar was last at 0.9404 francs from 0.9335 francs.
- The greenback was higher against the Canadian dollar at C$1.3604 from C$1.3547.
- The dollar was stronger against the Swedish krona at 10.4959 krona from 10.4303 krona.
- The euro was weaker against the dollar at $1.0551 from $1.0596.
- The pound weakened to $1.1946 from $1.2017.