Thursday’s regular session sell-off was led by high profile tech stocks like Amazon (AMZN), Facebook (FB) and Apple (AAPL), which led the Nasdaq to its worst day in about a week. Price action reflected how investors, who have bid up stocks relentlessly since late spring, are now rethinking prospects for a sharp economic rebound in the wake of a still raging COVID-19 pandemic and no immediate fiscal boost on the table.
Along those lines, another 860,000 workers filed unemployment claims in the latest period, but that figure remained below 1 million for a third straight week. In a partly encouraging sign, continuing claims — a closely watched metric of the labor market’s health in real time — fell below 13 million. However, new housing starts fell sharply last month, new data showed, a worrying harbinger that a hot housing market could be cooling despite record low interest rates.
On Wednesday, the Fed signaled that near-zero interest rates would remain for at least the next three years, as the US economy continues to face risks around the ongoing pandemic. The Federal Open Market Committee’s newly issued expectation for interest rates to remain near zero until at least the end of 2023.
Fed officials upgraded their economic projections for this year, and now anticipate a shallower decline in real growth, and a lower unemployment rate, by year-end when compared to earlier estimates. But officials suggested that the quicker-than-expected early economic recovery could be jeopardized in absence of further fiscal stimulus.