London Daily

Focus on the big picture.
Friday, Oct 02, 2026

US stocks whiplashed for second day as volatility grips markets

US stocks whiplashed for second day as volatility grips markets

United States shares were whipsawed again on Tuesday as investors await the Fed’s decision on Wednesday.

Wall Street investors may be in need of a neck brace, as nervousness over looming United States interest rate hikes saw share prices whiplashed for a second day running on Tuesday.

A selloff sent the Dow Jones Industrial Average down more than 800 points earlier in the session, but by afternoon trading in New York, it had pared the bulk of those losses.

The session ended with the blue-chip index losing 66.77 points, or 0.19 percent, to close at 34,275.49.

The broader S&P 500 index – a proxy for the health of retirement and college savings accounts – also clawed back from an earlier bruising but closed down 53.70 points, or 1.22 percent, at 4,356.43.

The Nasdaq Composite Index lost 315.83 points, or 2.28 percent, to close at 13,539.30 despite upbeat earnings results and forecasts from IBM and Verizon.

Stocks fell sharply on Monday before staging a major turnaround, with the Dow and S&P finishing in positive territory.

But volatility continues to rule trading as investors prepare for the Fed to hike interest rates.

The US Federal Reserve kicked off its first two-day policy-setting meeting of the year on Tuesday. In December, the Fed signalled it could raise interest rates at least three times this year to rein in soaring inflation that is running near a 40-year high. And some Wall Street analysts see the Fed hiking rates four times this year.

Higher interest rates raise the cost of borrowing – a negative for growth stocks that were the darlings of the coronavirus pandemic.

Markets are also in the midst of digesting a steady stream of fourth-quarter earnings with giants like Tesla and Apple due to report this week.

The Nasdaq could use a pick-me-up after confirming a correction last week. (A correction is confirmed when an index closes 10 percent or more lower than its record closing level.)

Crypto crash


Cryptocurrencies from Bitcoin to Ether have plunged in recent weeks, erasing over $1 trillion from their market value since the start of 2022.

The world’s largest cryptocurrency, Bitcoin, has fallen 50 percent from its November high of $69,000.

Ether, the coin of the Ethereum network and the world’s second most valuable cryptocurrency, has also taken a hit, dipping below $2,200 on Monday morning. Either hit an all-time high of $4,891 in November.

IMF downgrades growth


The International Monetary Fund on Tuesday downgraded its global growth forecast by a half percentage point for 2022, citing downgrades to the outlook for China and the US.

The fund cut its forecast for US growth by 1.2 percentage points, citing the stalemate over the passage of President Joe Biden’s Build Back Better spending plan, the Federal Reserve’s unwinding of pandemic stimulus measures, and continuing supply shortages that are driving inflation.

Many Wall Street analysts see price pressures and ongoing worker shortages as a headwind to the world’s largest economy.

“The US economy will be hindered by persistent labour shortages and reduced policy support,” the Global Economics Team at Capital Economics wrote in a note on Tuesday morning.

“While headline inflation is very likely to fall, we expect core inflation to remain elevated across the developed world as shortages persist and wage growth picks up.”

Consumer confidence takes a hit


US consumer confidence took a hit in January, following gains in the last quarter of 2021. Both confidence and spending may continue to be shaky due to rising prices and the lingering effects of the pandemic.

“Expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a press release.

US consumer confidence took a hit in January, following gains in the last quarter of 2021


But the proportion of Americans planning to buy a house, car or major appliances has still increased in the last six months. Consumers are less concerned with inflation than they were at the end of 2021. But in the grand scheme, that may mean very little as Americans’ concerns hit a 13-year high in November 2021.

Turbulent start to 2022


US equities have had a rough start to the new year. The S&P 500 is now down 10.4 percent from its record closing high on January 3. The tech-heavy Nasdaq has tracked its worst start to the year since 1980.

Beyond Fed rate hikes and inflation, investors are also growing cautious in the face of mounting tensions between Washington and Moscow over the Russia-Ukraine crisis.

On Monday, the US Department of Defense placed some 8,500 American troops on heightened alert to be deployed to Eastern Europe as reinforcements for the North Atlantic Treaty Organization.

Earnings season


Investors will also be eyeballing earnings this week when some mega-cap companies report their fourth-quarter earnings.

IBM, which reported on Monday, beat revenue and profit estimates on strong demand in its software unit. Shares rose 3.43 percent as of Tuesday afternoon.

Shares of General Electric Co fell 6.72 percent after the industrial conglomerate missed sales expectations as it struggled with supply-chain constraints.

American Express jumped 6.77 percent after it raised forecasts for revenue and profits after spending on its credit cards grew to a record.

Verizon Communications leaped past estimates for subscriber growth and gave a full-year earnings forecast that exceeded expectations.

Microsoft will report after market close today followed by Apple and Tesla later this week.

Newsletter

Related Articles

0:00
0:00
Close
Scottish Court to Rule on Bid to Force No-Confidence Vote Against Aberdeen Council Co-Leader
UK Bans Extra Charges for Seating Children Under 12 Beside Accompanying Adults
UK Introduces Vaping Duty and New Licensing Requirements
Greggs to Close Four UK Factories and Cut 740 Jobs
Hundreds of Prisoners Released Early as England and Wales Prisons Reach 98% Capacity
UK Unveils New Russia Sanctions Targeting War Funding and Shadow Fleet
Burnham Says There Are Strong Indications of Iranian Involvement in RAF Fairford Security Breach
Prime Minister Andy Burnham Raises Prospect of Reviewing Britain's Post-Brexit EU Relationship
Markets Price in Bank of England Rate Increases as Inflation Rises to 3.1%
UK Borrowing Costs Climb Toward 5.5% as Global Bond Sell-Off Intensifies
UK-France One-In-One-Out Migration Agreement Expires as London Seeks Alternative Measures
Southwest England Faces Flood Alerts After Heavy Autumn Storms
UK Expands Funding for Rapid Electric Vehicle Charging Infrastructure
Welsh Government Approves Funding to Upgrade South Wales Transport
Northern Ireland Tensions Rise as Orange Order Rejects Drumcree Compromise
NHS Leaders Back Early Design of Proposed National Care Service
More Than One-Third of Regional UK Universities Face Financial Deficits
UK Current Account Deficit Narrows as Cross-Border Financial Flows Remain Strong
Bank of England and FCA Issue New Rules for Stablecoins and Digital Assets
MI5 Warns UK Universities Over Research Links With Chinese Institutions
UK Energy Price Cap Rises 4% as Electricity VAT Is Temporarily Suspended
Equity Calls for UK Personality Rights to Protect Performers From AI Replication
OpenAI Pauses Advanced Model Training Following Safety Concerns
Scottish Government Proposes Replacing 32 Councils With Larger Regional Authorities
Ofgem Raises UK Household Energy Price Cap by 4% From October
UK Counter-Terrorism Police Continue Investigation After Five Arrests Near RAF Fairford
OECD Cuts UK 2027 Growth Forecast to 1%
Labour Says State Pension Triple Lock Remains Protected Through Current Parliament
Andy Burnham Pledges National Care Service With Free Social Care in England
Six Flags Permanently Shuts Landmark X2 Roller Coaster Following Safety Scandals
Metropolitan Police Rule Out Terrorism in Golders Green Stabbing Investigation
Lithium-Ion Battery Identified as Cause of Fatal Merseyside House Fire
UK Department Rejects New Sea Use Framework Due to Stakeholder Fatigue
Major Thames Water Pipe Burst Causes School Closures in London
Aldi Commits £900 Million to Expand UK Supermarket Network
Scottish Affairs Committee Warns Skills Shortages Threaten Defence Sector Expansion
Parliamentary Committee Warns Northern Ireland Budget Deadlock is Stalling Economic Growth
NHS Hospitals in England Face Severe Shortages of Essential Medications
Home Secretary Signals Major Overhaul of UK Immigration and Leave to Remain Policies
Chancellor Promises New Job Schemes Alongside Strict Fiscal Discipline
Energy Secretary Proposes Taxpayer-Funded Green Transition and National Electricity Grid
UK Government to Renationalise Avanti West Coast Railway Franchise in March
Prime Minister Andy Burnham Pledges Major Social Care and Infrastructure Reforms
Five Suspects Released on Bail Following Alleged Bomb Plot Near RAF Fairford
UK Diesel Prices Hit Record High of 199p Per Litre
Transport for Wales and Network Rail Complete Electrification of South Wales Metro
Defra Expands Incentives for Sustainable Farming and Biodiversity in England
Northern Ireland Executive Approves Funding Package to Resolve Public Sector Pay Disputes
Universities UK Warns of Financial Insolvency Risks for Higher Education Institutions
UK Prisons Activate Emergency Protocols to Manage Capacity Pressures
×