The Federal Reserve is set to provide a policy update tonight, following a multi-day meeting that will outline the expected course of action in 2022.
Experts continue to expect as many as three rate hikes in 2022 as part of the ‘fight against inflation’ but at the very least, the tapering of bond purchases will be sped up.
This was reiterated when the wholesale producer price index showed a 0.8% increase in costs in November, taking the annual rate to 9.6%.
Yields increased very slightly on the news, pushing the high growth Nasdaq index down 1.1%.
The S&P 500 also felt the brunt of the sell-off, falling 0.8%, as a combination of non-OPEC oil production increases and weakness in the motor vehicle sector dragged the market lower.
Meanwhile, the Dow Jones fell just 0.3% after a rally in the financials sector.
Tesla, car makers sold off
Tesla (NASDAQ: TSLA) shares were down more than 2% as Elon Musk’s share sale continues, albeit the proceeds are being used to buy more options in the company.
The likes of Ford (NYSE: F) and General Motors (NYSE: GM) also fell as the electric vehicle war is set to begin in earnest in 2022 and potentially hit profitability.
US stock market movers
Here’s how other popular US stocks fared on Tuesday.
- Beyond Meat (NASDAQ: BYND) up 9.3%
- Axon (NASDAQ: AXON) up 4.9%
- Uber (NYSE: UBER) up 4.3%
- Microsoft (NASDAQ: MSFT) down 3.2%
- Atlassian (NASDAQ: TEAM) down 4.9%
- Adobe (NASDAQ: ADBE) down 6.6%
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is tipped to follow US markets lower at the open this morning. For all the latest, check out my ASX 200 morning report.
