The stock investors at Wall Street seem to be bracing up for further signals next week that the US Federal Reserve Bank could raise the major rates sooner rather than later this year, amid the sales in retail sector expected to recover after tumbling for two straight months.
A boost in retail sales could show the consumers are getting benefits from sharply reduced oil prices. But the financial analysts say spending in February may have been curbed by unusually vulnerable weather conditions prevailing in parts of the United States.
The stronger-than-expected jobs report, released on Friday, also boosted the expectations of a rate hike as soon as June, making the market to sell off.
The Nasdaq was over 70 points off the 5,000-level hit this week for the first time in the past 15 years. The S&P 500, on the other hand, ended the week more than two percent off its closing record high on March 2.
Meanwhile, several Fed officials came up with their comments while underlining their expectations of a rate hike in June.
Richmond Federal Reserve President Jeffrey Lacker supported the notion of raising the key rates in June.
Kim Forrest, senior equity research analyst at Pittsburgh-based Fort Pitt Capital Group, said, “The Federal Reserve is back at the top of the circle in terms of the investor focus. The economy has been getting better, and what I think they’re trying to do is overstay the party to make sure the economy really is better. I think they’re feeling some pressure to show that they really are data driven.”
As a stronger economy is better for the country’s stock market in the long run, the investors have high concerns that if the US central bank raises rates too soon, it could dampen the pace of economic growth that has been slow to rebound.