The gloomy mood among investors was caused by the sharp rate hike by the US Federal Reserve on Wednesday. This fueled fears of economic contraction. The central bank indicated that it was prepared to accept a recession and higher unemployment in order to contain the high inflation. In any case, the rapid increase in interest rates is experienced as annoying by investors. Higher interest rates are unfavorable for riskier investments such as stocks.
Key indicators closed mixed on Friday after Federal Reserve Chairman Jerome Powell reiterated that the Fed really wants to reduce currency depreciation in the world’s largest economy to 2 percent. The Dow-Jones index was down 0.1 percent at 29,888.78 points. The leading index fell below 30,000 points for the first time since January last year on Thursday. For the S&P 500, there was a small plus on the last trading day of the week, of 0.2 percent at 3674.84 points. Tech gauge Nasdaq gained 1.4 percent at 10,798.35 points, after the price boom of 4 percent a day earlier.
American investors were also getting ready for a long weekend. On Monday, Wall Street will be closed for Juneteenth, which commemorates the end of slavery in the United States. The euro was worth $1.0496, against $1.0473 at the close of the European stock markets earlier in the day. A barrel of US oil cost nearly 7 percent less at $109.68. Brent oil became about 6 percent cheaper at $113.05 a barrel.