Good Evening. Investors continued to follow a constant stream of corporate earnings data against a backdrop of higher inflation and additional Fed policy tightening, and equities in the United States sank on Thursday.
The S&P 500 finished down 1.48% while the Dow Jones fell by 1.05%. However, the Nasdaq takes the sad cake and fell the most by 2.07%.
ELON IS NOT BACKING DOWN
According to a filing on Thursday, Tesla CEO Elon Musk is exploring acquiring shares of Twitter (TWTR) through a tender offer at a price of $54.20 per share.
Musk has secured commitment letters for financing totaling $46.5 billion. Musk would use a tender offer to buy shares directly from current Twitter shareholders.
The filing comes after Musk made a bid to buy Twitter for $54.20 a share, or more than $40 billion, last week. However, Twitter implemented a “poison pill,” or limited-term shareholder rights plans, in an effort to prevent a takeover and prevent Musk from building a greater interest in the company.
At closing, TWTR finished up 0.77% to $47.08 per share.
Chairman of the Federal Reserve, Jerome Powell, emphasized on Thursday that the central bank’s primary goal at this point is to reduce inflation while avoiding pushing the economy into a recession.
Powell stated, “Our goal is to use our tools to get demand and supply back in synch so that inflation moves down, and do so without a slowdown that amounts to a recession.” He continued, “it’s absolutely essential to restore price stability. We need that to have a strong labor market over an extended period of time. We need it for financial stability. So we must do that.”
Interest rate hikes are one of the key instruments the Federal Reserve has to keep inflation under control, as higher rates reduce demand and put downward pressure on rising prices. With this in mind, Powell stated that a 50 basis point rate hike at the Fed’s next meeting may well be necessary to accomplish the central bank’s price stability goal.