Stocks Slump 3% As Worries Grow over Higher Interest Rates

Traders are starting to fret more about the impact of the Fed’s moves to dampen demand and slow the economy.

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FILE - The New York Stock Exchange logo adorn trading posts, on the floor, Wednesday, March 16, 2022. Stocks are opening lower on Wall Street Thursday, May 5, giving up some of the big gains they made a day earlier. Technology companies were leading the declines. (AP Photo/Richard Drew, File)
Image via AP Photo/Richard Drew

This article was republished here with permission from The Associated Press, however it is no longer available to read on Snopes.com.

NEW YORK (AP) — Stocks are slumping on Wall Street, erasing a rally from a day earlier, as markets assess the looming fallout from the Federal Reserve’s stepped-up fight against inflation. On May 4, 2022, the Fed raised its benchmark interest rate by half a percentage point as part of an effort to slow consumer borrowing and tamp down inflation, which is at a four-decade high. The market rallied when Fed Chair Jerome Powell dismissed…

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