US stocks tumbled on Thursday, September 22, 2023, as investors fretted over the possibility of a government shutdown and further interest rate hikes by the Federal Reserve.
The Dow Jones Industrial Average closed down 1.1%, the S&P 500 lost 1.6%, and the Nasdaq Composite Index fell 1.8%. All 11 sectors of the S&P 500 ended in the red.
The sell-off was sparked by concerns that a government shutdown could loom if Congress fails to pass a spending bill by the end of the month. Far-right members of the House of Representatives have so far blocked key spending bills, raising the risk of a shutdown after midnight on September 30.
Investors are also worried about the potential for further interest rate hikes by the Fed. The central bank has already raised rates aggressively this year in an effort to combat inflation. However, Fed officials have signaled that they are prepared to raise rates even further if necessary.
"The uncertainty surrounding the government shutdown and the Fed's next move is weighing on investors' sentiment," said Patrick O'Hare, an analyst at Briefing.com.
Large-cap technology stocks were among the hardest hit in the sell-off. Amazon shares dropped 4.4%, Google parent Alphabet lost 2.4%, and Tesla shed 2.6%.
However, there were a few bright spots in the market. Cybersecurity company Splunk shot up 20.8% after it announced an agreement to be acquired by Cisco, which fell 3.9%. FedEx jumped 4.5% after easily topping earnings estimates.
Overall, the sell-off on Thursday was a reminder of the risks facing investors in the current market environment. The combination of rising interest rates, a potential government shutdown, and the ongoing war in Ukraine is creating a great deal of uncertainty for businesses and consumers alike.
