US stock market suffers worst week in nearly a decade

US stock market suffers worst week in nearly a decade

While he highlighted Powell's focus on solid growth prospects, Naroff said the markets may have wanted the Fed to keep rates on hold next year. The unemployment rate is 3.7 percent, a 49-year low. Barring huge gains, this will be the worst December for the US market since the 1930s.

Still, traders are unconvinced, which is one reason why stocks fell after the Fed's latest decision. The U.S. economy has been growing since 2009, and most experts think it will keep expanding for now.

However, investors were not placated by the slower pace of future rate increases.

But the slight revision was not enough to ease market fears over a further US economic slowdown on the back of trade tensions, a waning boost from tax cuts and tightening monetary conditions for companies.

Over the course of the past few months, many analysts have been saying that the United States economy is on its way to experiencing another major meltdown (much like the one it faced in 2008).

Fragile markets continue to react to a flood of news, from rate increases to plunging oil prices to an impending us government shutdown.

Dysfunction in Washington isn't helping the situation, with another Trump administration cabinet member announcing his resignation this week and the government Friday night on the brink of a partial shutdown.

There are also fears that the brisk pace of US growth this year reflected something of a sugar high, with the economy artificially pumped up by tax cuts and a boost in government spending.

Drawing those two facts together and applying them to the ASX 200, what you get is this: a mining and banking sector at the forefront of market participant's anxiety. Volume is also below average which suggests some of the bigger market players may have already taken to the sidelines. Google parent Alphabet was down 3 percent, Amazon down almost 5 percent, Facebook down more than 5 percent, Netflix almost 5 percent and Apple was in the red less than 2 percent.

The technology-heavy Nasdaq composite is down 19.5 percent from its record high in August.

The major US indexes fell 7 percent this week and they've sunk more than 12 percent in December. It's widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed.

In New York, U.S. S&P 500 Index lost 1.54 per cent to hit its lowest level since September 2017. Their huge popularity during the recent boom years in the market made them even more vulnerable when investors' mood turned sour, as it has this fall.

The "Big Four" were a major drag; Westpac Banking Corp fell 1 per cent and National Australia Bank fell 1.1 per cent, both touching their lowest in more than six years. The Dow ended down 352 points, or 1.5 percent, to 23,323. Even though the ASX200 missed out on the parabolic rise experienced by U.S. indices during the cheap-money, bull-market era, the concerns hindering sentiment directly relate to the fortunes of the ASX.

"If they do it right, it could actually help the market", said David Kelly, chief global strategist for JPMorgan Funds. USA crude oil slipped 0.6 percent to $45.59 a barrel in NY. Lockheed Martin fell 1.9 percent to $260.14 and Raytheon shed 2.6 percent to $153.78.

"Clearly the Fed is changing its tone and it's getting a little more dovish following the market reaction this week", said Adam Sarhan of 50 Park Investments. Brent crude, the standard for global oil prices, fell 1.3 percent to $53.67 a barrel in London. Natural gas jumped 6.5 percent to $3.82 per 1,000 cubic feet.

Brent crude, used to price worldwide oils, rose 79 cents to $55.14 per barrel in London. The yield on the 10-year Treasury note stayed at 2.79 percent.

US gold futures were up 0.2 percent at $1,258.40 per ounce.

It could make 2019 a hard year for the Fed, and Powell seemed to acknowledge as much in a post-policy-meeting press conference on Wednesday as he tried to fit the square peg of a potentially weaker outlook into the round hole of stricter policy.

The less upbeat outlook sent shares tumbling and Wall Street closed down sharply, while the dollar advanced against the euro.

Pan Pylas contributed to this story from London.

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