US markets end lower after Powell sounds alarms on surging inflation and vowed tough action

22 Mar 2022 Evaluate

The US markets ended lower on Monday after Federal Reserve Chair Jerome Powell sounded alarms on surging inflation and vowed tough action. Powell said inflation is much too high and pledged to take necessary steps to bring prices under control. He noted rate hikes could go from the traditional quarter-percentage-point moves to more aggressive half-basis-point increases if necessary. The comments from Powell come after the Fed raised interest rates by 25 basis points last week and signaled more rate hikes are likely in the coming months. Further, the pullback on markets also reflected profit taking, as lingering concerns about the Russia-Ukraine conflict and higher oil prices inspired some traders to cash in on last week's gains.

On the sectoral front, tobacco stocks turned in some of the market's worst performances on the day, dragging the NYSE Arca Tobacco Index down by 2.7 percent. Concerns about the outlook for interest rates also weighed on housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index. Airline stocks also gave back ground following recent strength, resulting in a 1.4 percent dive by the NYSE Arca Airline Index. Brokerage and retail stocks also saw notable weakness on the day, while energy stocks moved sharply higher along with the price of crude oil.

Dow Jones Industrial Average fell 201.94 points or 0.58 percent to 34,552.99, Nasdaq dropped 55.38 points or 0.4 percent to 13,838.46 and S&P 500 was down by 1.94 points or 0.04 percent to 4,461.18.

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