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Saturday, Sep 07, 2024

White House admits stock market 'not something we keep an eye on every day'

White House admits stock market 'not something we keep an eye on every day'

The Dow Jones Industrial Average fell more than 1,100 points on Wednesday, marking its worst day since 2020

White House press secretary Karine Jean-Pierre said Wednesday that the stock market, which continues to witness erratic trading amid soaring inflation, is not something the White House tends to "keep an eye on every day."

Asked about the stock market's recent performance amid rising interest rates from the Federal Reserve and the potential for "gains that have defined" President Biden's presidency being erased, Jean-Pierre said "nothing has changed" on how the White House views the stock market's behavior.

"Nothing has changed on how we see the stock market," Jean-Pierre told reporters. "That's not something we keep an eye on every day, so I'm not gonna comment on that from here."

Earlier this year, former White House press secretary Jen Psaki said Biden "does not look at the stock market as a means by which to judge the economy."

U.S. stocks saw steep selling Wednesday as more retailers revealed the negative impact of inflation amounting to the worst day for stocks since 2020.

The Dow Jones Industrial Average fell over 1,100 points, or 3.6%, while the Nasdaq Composite tumbled nearly 5% and the S&P 500 dropped 4%.

Target shares tanked after disclosing rising costs will hurt profitability for the remainder of the year. This follows Walmart's lower-than-expected profit report Tuesday that was also blamed on inflation. The Fed will "have to consider moving more aggressively" if inflation that is running at a four-decade high fails to ease after earlier rate hikes, chair Jerome Powell said at a Wall Street Journal conference.

Federal Reserve Chairman Jerome Powell testifies during a hearing at the Hart Senate Office Building on September 28, 2021 in Washington, DC.


In a recent analyst note, Goldman Sachs lowered its year-end price projection for the S&P for the third consecutive time to 4,300 — which is actually a potential 8% upside to current levels, though down 10% from the start of the year. Goldman initially forecast that the S&P would close out the year at 5,100.

But the outlook is much bleaker if the economy is dragged into a recession this year: Goldman projected the S&P would fall close to 11% from the benchmark's current level, finishing the year around 3,600. That would mark a steep, 25% decline from the beginning of the year.

The index has already plunged in recent weeks as concerns over sky-high inflation, rising interest rates and a darkening economic outlook continue to weigh on the market.

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020.


Since the start of the year, the benchmark S&P has dropped more than 16%, nearing bear market territory. The last time the S&P entered a bear market was in March 2020 at the start of the COVID-19 pandemic.

There are growing fears that the Fed will trigger a recession. Hiking interest rates tends to create higher rates on consumer and business loans, which slows the economy by forcing employers to cut back on spending. Bank of America, as well as Fannie Mae and Deutsche Bank, are among the Wall Street firms forecasting a downturn in the next two years.

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