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US open: Stocks down across the board as selling accelerates on Wall Street
US stocks moved lower at the open on Thursday, as investors continued to mull over the latest policy announcement from the Federal Reserve overnight, amid worries about a trade war, leading to what one analyst referred to as "a veritable bloodbath" on Wall Street.
At 1530 GMT, the Dow Jones Industrial Average and Nasdaq had lost 1.72% and 1.75, respectively, and the S&P 500, which after turning negative, erasing all of its year-to-date gains, was down 1.62%.
Stocks ended in the red on Wednesday after the Fed lifted rates by 25 basis points as widely expected, to a target range of 1.5% to 1.75%, and signalled that rates would rise twice more this year and three times in 2019.
Fed chair Jerome Powell said at the press conference: "We're trying to take the middle ground. On the one hand, the risk is we wait too long and then we have to raise rates quickly, and that foreshortens the expansion. We don't want to do that.
"On the other side if we raise rates too quickly inflation doesn't get sustainably up to 2pc and that will hurt us going forward. We need that, we need to make sure inflation expectations are anchored.
"The middle ground consists of further gradual increases in the Federal Funds Rate as long as the economy is broadly on this path."
Goldman Sachs said there was "something for everyone" in the FOMC meeting.
"On the dovish side, the committee downgraded the near-term growth assessment and narrowly kept to a three-hike median for 2018. On the hawkish side, the committee noted an improved outlook, significantly upgraded its growth and employment forecasts, projected an inflation overshoot in 2019-2020, and steepened its post-2018 funds rate path by more than we and probably most others had expected.
"When all was said and done, the market took the meeting outcome as slightly dovish, with bond yields and the dollar both lower on the day," they said.
It wasn't just the Fed keeping investors on edge though, as worries about a possible trade war weighed on sentiment, alongside news that President Trump's administration is planning to announce a package of punitive measures later in the day that includes tariffs on Chinese imports worth at least $30bn.
Oanda analyst Craig Erlam said: "Donald Trump seems intent on starting trade wars, most notably with China, which could trigger a wave of protectionism and drive up prices in the US and likely weigh on the growth momentum.
"How the central bank deals with this will be very interesting given the already fast pace of hikes. Policy makers may well be feeling very happy with the decision to get ahead of the curve with tightening as it affords them the ability to maintain gradual hikes now."
Conor Campbell, a financial analyst at SpreadEx, added "With Jerome Powell forcing the recent international trade concerns to the forefront of investors' minds on Wednesday evening, and Donald Trump prepping to announce his trade tariffs later in the day, the US open was a veritable bloodbath."
On the macroeconomic front, the number of Americans filing for unemployment benefits unexpectedly picked up last week, according to data from the Labor Department.
US initial jobless claims rose by 3,000 from the previous week's unrevised level to 229,000, versus expectations for a drop to 225,000 while the four-week moving average was up 2,250 to 223,750 from the previous week's average, which was also unchanged from the previous estimate.
Elsewhere, business activity in the US weakened in March, according to IHS Markit.
In a report published by the market research group on Thursday, its composite purchasing managers' index (PMI), which covers both the manufacturing and services sectors, fell to 54.3 in March, from its prior reading of 55.8.
"The flash PMI surveys indicate that the economy likely continued to expand at a robust pace in March, rounding off a solid opening quarter of the year," said IHS Markit's chief economist Chris Williamson, who noted that the data pointed to GDP growth of 2.5% in the first quarter.
In corporate news, Facebook was down 2.27% as chief executive Mark Zuckerberg vowed to change the company in the wake of the Cambridge Analytica scandal. Zuckerberg said the group is taking actions to ensure the Cambridge Analytica data exploit doesn't happen again and that it will investigate any apps that have access to large amounts of data.
Guess shares surged 26.93% after the company beat earnings and sales expectations, and transportation and supply chain management product provider Ryder was down 3.74% after the release of its last earnings report.
FedEx shares lost 5.02% despite posting improved revenues.