Stocks fell on Thursday as investors grew more optimistic that the Federal Reserve would continue to raise rates despite signs of slowing inflation.
The Dow Jones Industrial Average fell 198 points, or 0.6%. The S&P 500 and Nasdaq Composite shed 0.4% and 0.3%, respectively.
Initial unemployment insurance claims fell to their lowest level since late June last week, the Labor Department said Thursday, signaling to investors that the job market is improving amid a sluggish economy.
The demand totaled 190,000 updated during the week ended January 14, down 15,000 from the previous period. Economists polled by Dow Jones have been looking for 215,000.
Investors have been looking to the latest developments and Fed statements to determine the direction of interest rates. But, despite the latest figures showing a slowdown in inflation, JPMorgan Chase CEO Jamie Dimon thinks rates will rise 5%.
“I think there’s a lot of upside, that’s not going to go away quickly,” Dimon told CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland.
Wall Street is coming off a losing streak. The S&P 500 fell 1.56% on Wednesday for its worst day since Dec. 15. The Dow lost more than 613 points, or 1.81%. The tech-heavy Nasdaq Composite fell 1.24%, snapping seven straight days of gains. Bank stocks such as JPMorgan, Bank of America and Wells Fargo fell, weighing on the broader market.
Disappointing sales and weaker-than-expected inflation fueled fears of a recession, sending stocks lower on Wednesday.
Elsewhere, investors look to important quarterly reports to see if there is a shortage of cash. Netflix will explain its findings after the bell.
