STORY: The S&P 500 closed the books on its steepest September decline in over a decade on Friday, skidding across the finish line of a tumultuous quarter fraught with historically high inflation, rising interest rates and recession fears.
All three major indexes ended sharply lower, having reversed a brief rally early in the session.
The Dow lost 1.7%, and the S&P 500 and Nasdaq both shed a percent and a half.
Federal Reserve Chair Jerome Powell has rattled markets with an increasingly aggressive stand on high inflation resembling that of former Fed Chair Paul Volcker, who tamed inflation in the early 1980s by drastically tightening monetary policy.
But things could turn around for stocks as soon as November, says George Ball, Chairman of Sanders Morris Harris.
“I worked at the Prudential Insurance Company when Paul Volcker was on the board. Paul told me while there that the way to kill inflation was like killing a snake. You needed to kill the snake and then cut the head off the snake and show it to everybody prominently so they understood the snake was dead. That I think is what the Fed is doing now. [FLASH] They’re showing the head of the dead snake to investors, to the public at large. [FLASH] Markets look ahead I think by generally six to nine months, and by mid-November, that’s probably a timing inflection point where I think stocks could become attractive again rather than being as they are today – pulled down by negative sentiment just on a day-to-day trend basis.”
As for the individual movers, shares of cruise operator Carnival plunged more than 23%, while Nike, the world’s largest sportswear company, dropped by nearly 13% after both cited inflation-related margin pressures.
Apple, Microsoft and Amazon were among stocks weighing the heaviest on the S&P, with the iPhone maker losing 3%.