Fed Rate And Israel-Hamas Conflict Makes Investors Anxious, Wall Street Drops

Share illustration (Photo: dock. Antara)

JAKARTA - Wall Street ended in falling on trading Friday, October 20 New York time. This was triggered by fears of an increase in interest rates by the Fed and the widespread Israeli-Hamas conflict.

Quoting Antara, the S&P 500 Index fell 53.84 points or 1.26 percent to 4,224.16, the Nasdaq Composite Index weakened 202.37 points or 1.53 percent to 12,983.81, and the Dow Jones Industrial Average Index corrected 286.89 points or 0.86 percent to 33,127.28.

This week, S&P 500 fell 2.4 percent, Nasdaq weakened 3.2 percent, and Dow Jones fell 1.6 percent.

"Geopolitically, towards the weekend, investors will be careful and take the money," said Alan B. Lancz & Associates Inc. Alan Lancz in Toledo, Ohio.

The S&P 500 financial index fell 1.6 percent, while the KBW regional banking index weakened 3.5 percent. Regions Financial shares corrected 12.4 percent because the company's profit missed analysts' expectations.

The yield of 10-year US bonds fell on Friday (20/10) after surpassing 5 percent the previous day for the first time since July 2007 driven by comments by Federal Reserve Chairman Jerome Powell.

Powell said the US economic power and strict labor markets require stricter loan conditions to control inflation.

Meanwhile, the Cboe Volatility Index closed at its highest level since March 24, 2023.

SolarEdge shares fell 27.3 percent after the company estimated significantly lower revenue in the fourth quarter. American Express credit card company shares fell 5.4 percent even though third-quarter earnings exceeded expectations.

The third-quarter financial reporting season is ongoing, with 86 companies at S&P 500 having reported on its performance. Reports from a number of middle-scale banks raised concerns that the boost to lenders from the Fed's rate hikes is decreasing.

Trading volume on the US exchange reached 11.05 billion shares compared to an average of 10.58 billion shares for a full session over the last 20 trading days.

The number of shares that fell exceeded the number of shares which rose with a ratio of 2.63 : 1, while for Nasdaq the ratio was 2.28 : 1.

The S&P 500 recorded no new highs in 52 weeks and 37 new lows, while the Nasdaq recorded nine new highs and 420 new lows.