Stocks plunged globally on Friday after Federal Reserve chairman Jerome Powell said the Fed would continue to raise interest rates to stamp out the threat of inflation.
Speaking at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming, Powell said interest rates would be held at a higher level until inflation has been brought under control.
“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” said Powell in a short speech. “The historical record cautions strongly against prematurely loosening policy.”Looking to the future, June Federal Open Market Committee (FOMC) projections suggest rates will rise to just below 4% through to the end of 2023 as Powell pointed to historical accounts that warn against loosening policy too soon.
Federal Reserve chairman Jerome Powell: “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.”
The bleak forecast triggered a 1,000-point drop in the Dow Jones average, while percentage losses were even steeper on the S&P 500 and the Nasdaq Composite.
Indeed, for the week ended Friday 26 August, the S&P 500 fell 4%, surrendering its gains for the month of August, as the Dow Jones sank 4.2% and the tech-heavy Nasdaq slid by 4.4%.
Penn Entertainment suffered the biggest dip as the stock fell by 5.91% daily, followed up by IGT (5.57%) and Caesars Entertainment (5.42%).
Similar declines impacted Sportradar (5.20%) and DraftKings (5.16%), while Genius Sports, Gambling.com Group, MGM and Wynn Resorts all stooped somewhere between 4% and 5%.
Europe’s gambling operators were not spared either. The update saw London-listed 888’s stock finish the week 7.55% lower, while Stockholm-listed Kindred Group and Betsson ended the week down 4.22% and 3.95% respectively.