Stock Market Volatility Drives Nasdaq Downwards, Reserve Bank of Australia’s Interest Rate Decision
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Summary:
- Nasdaq fell more than 0.7% on Tuesday.
- RBA interest rate decision.
Nasdaq down 0.74% on Tuesday
In a volatile post-Labor Day session on Tuesday, U.S. stocks fell as investors remained on edge in anticipation of the Federal Reserve's upcoming policy decision later in the month. The declines on Tuesday were led by the tech-heavy Nasdaq Composite, which fell 0.7%. The movements follow three weeks in a row in which the major averages have lost money.
Following the release of new data showing that U.S. services activity accelerated in August, losses throughout the equity market continued. This gave investors reason to believe that Fed officials could go with a larger rate rise of 75 basis points on September 21.
IXIC Price Chart
Reserve Bank of Australia’s interest rate decision
The Reserve Bank of Australia (RBA), which raised interest rates by another 50 basis points on Tuesday, together with indications that the central bank is reaching the conclusion of its tightening cycle, left the Australian Dollar floundering. By raising rates by 50 basis points, the RBA satisfied market expectations and promised additional rate increases in its outlook.
However, the RBA acknowledged "higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments". This is a sign from the Bank that it thinks the time has come to scale back on raising interest rates because the full impact of recent moves has not yet been felt.
Sources: fxmag.com, poundsterlinglive.com, finance.yahoo.com
