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Stock markets tumble globally as Fed resets expectations: $400 billion wiped off SpaceX
Fortune • • business
Key Points:
- Tech stocks declined sharply as investors adjusted expectations for U.S. Federal Reserve interest rate hikes, following a hawkish tone from new Fed chair Kevin Warsh suggesting rates might rise later this year.
- SpaceX shares fell 16.43%, wiping $400 billion off its market value, amid broader tech sell-offs driven by concerns over higher borrowing costs for AI-focused companies heavily reliant on debt.
- Oil prices dropped to $77 per barrel on optimism about U.S.-Iran cooperation to keep the Strait of Hormuz open, potentially influencing the Fed's inflation outlook and future monetary policy.
- Bank of America economist Aditya Bhave forecasts three Fed rate hikes this year, potentially raising the policy rate to 4.25-4.5%, due to persistent inflation pressures.
- The Strait of Hormuz remains tense with conflicting navigation demands from Iran and the U.S., complicating shipping operations despite increased vessel transits, raising concerns over regional stability.
