By Yasin Ebrahim
Investing.com -- The S&P 500 cut losses Thursday, as Federal Reserve officials downplayed the prospect of a 1% rate hike, though disappointing quarterly results from major Wall Street banks fueled recession fears and soured investor sentiment.
The Wall Street bank also set aside more money than expected for potential loan losses, raising concerns about the strength of the U.S. consumer.
Technology turned positive as Treasury yields retreated after Federal Reserve governor Christopher Waller played down the prospect of the Federal Reserve rolling out an unprecedented 1% rate hike later this month.
“You don't want to overdo rate hikes,” Waller said Thursday, adding that the market had got "ahead of themselves" on pricing a 100 basis point hike, though he didn’t rule out the prospect of a larger hike.
“If that data come in materially stronger than expected it would make me lean towards a larger hike at the July meeting,” he added.
St. Louis Federal Reserve President James Bullard reportedly also said he would favor a 75 basis point hike at the July meeting.
The odds of a 1% rate hike fell to about 50% from 80% a day earlier, according to Investing.com’s
The chipmaker also raised its full-year revenue forecast, helping to cool concerns somewhat about the chip demand outlook.
Energy was also one of the major decliners as oil prices added to recent losses on concerns that a global recession will dent demand for energy.
In other news, Cisco (NASDAQ: CSCO ) fell nearly 2% as JPMorgan downgraded the stock to neutral from outperform on worries that “supply and spending hesitations” will weigh on demand.
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