Dow Hits Mid-June Low as Hawkish Fed Rhetoric Takes Toll
The Dow Jones Industrial Average plummeted to its lowest level since mid-June as investors absorbed another dose of hawkish rhetoric from Federal Reserve officials.
New York Fed President John Williams and Philadelphia Fed President Patrick Paulson both weighed in on the possibility of future rate increases, with Williams suggesting that another hike this year looks 'reasonable' and Paulson hinting that rates may need to rise a bit more.
The Dow's decline was led by Sherwin-Williams, Walmart, and IBM, which were among its three biggest decliners. The index dipped below the 51,200 mark set in mid-September and has retraced about 70% of its June-to-August advance that peaked near 54,750.
However, the market's losses were partially offset by a Reuters report indicating that US and Iranian negotiators are discussing a phased deal to reopen the Strait of Hormuz. As a result, Brent crude prices settled above $106 a barrel and finished higher on the day.