On The Money — Wall Street’s rate hike whiplash

The stock market took its biggest punch of 2022 today as Wall Street grappled with the cost of rate hikes.

We’ll also look at the White House’s concerns about the economic implications of overturning Roe and efforts to move both Ukraine and COVID-19 aid in the Senate.

But first, track the rise and fall (and steep rise again) of U.S. home prices.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Subscribe here.

Dow, Nasdaq suffer worst day since 2020

Stocks plummeted Thursday as Wall Street reversed from a torrid post-rate hike rally into its worst day of losses this year. 

• The Dow Jones Industrial Average fell by 1,060 points Thursday, closing with a loss of 3.1 percent. The S&P 500 fell 3.6 percent on the day, and the Nasdaq plunged 5 percent lower before the opening bell. 
• The Dow and Nasdaq suffered their worst single-day losses since 2020, and the S&P suffered its second-worst day of the year, according to CNBC. 

The background: All three indexes closed with gains of roughly 3 percent Wednesday after the Federal Reserve hiked interest rates by 0.5 percentage points.

But Wall Street’s confidence appeared to slip Thursday morning as investors reckoned with how high the Fed may need to raise interest rates regardless of Powell’s current expectations. 

“The stock market was irrationally exuberant yesterday when it rallied sharply,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, in a Thursday analysis. 

“When the Fed raises rates quickly it is dangerous to the stock market and today we are seeing an example of that,” he continued. “We continue to believe that the Fed is going to aggressively fight inflation by tightening financial conditions, regardless of how much damage that inflicts on the stock market in the near term.” 

Sylvan breaks it down here. 

ECONOMY OVERRULED?

White House adviser: Overturning Roe would hurt economy 

White House economic adviser Jared Bernstein argued in a CNN interview that the possibility of the Supreme Court overturning the landmark Roe v. Wade decision that legalized abortion would have a devastating impact on the economy for women in conservative states. 

“Financially, it’s like losing a job,” Bernstein told CNN’s Brianna Keilar on Thursday. “It’s like being evicted, it’s like losing health insurance, it’s like going to the hospital in terms of its impact on their finances.”

• Those comments come after draft opinion in favor of overturning the nearly five-decade-old Roe abortion decision was leaked to Politico this week, a ruling that drew outrage from Democrats. 
• Bernstein said that his research found “when you deny access to reproductive rights in general, but abortion rights in particular to women, they have persistently worse economic outcomes.” 
• He added that it would disproportionately impact lower income people, who are less likely to have the means to travel to a place with abortion access.  

The Hill’s Elizabeth Crisp has more here.

THERE IS NO TRY 

Democrats eye linking Ukraine package to coronavirus aid 

Senate Democrats are eyeing linking more assistance for Ukraine to a stalled coronavirus aid package after weeks of privately mulling the path forward. 

• Sen. Dick Durbin (Ill.), the No. 2 Senate Democrat, said folding the two together came up during a closed-door lunch this week. He told reporters: “I know Chuck wants to move a Ukraine package and put COVID in with it.” 
• Durbin also cautioned that he wasn’t sure a final decision had been made to tie them together, but said, “We’re going to try. That’s the ambition. We want to get them both done.” 

Senate Majority Leader Charles Schumer (D-N.Y.) has repeatedly talked about the need to pass both Ukraine assistance and coronavirus aid, but has been cagey about whether he would link them.

Asked about putting them together in one package, Schumer only said on Thursday, “Stay tuned.” 

The administration recently requested more than $30 billion in additional Ukraine aid, which on its own is expected to get broad bipartisan support. 

But Republicans are vowing to oppose it if Democrats attach $10 billion in coronavirus assistance, which has been stalled because of a fight over the border. 

The Hill’s Jordain Carney has more here. 

KEEP YOUR FRIENDS CLOSE 

Boeing plans to move HQ to Arlington 

Boeing announced on Thursday that it would be moving its headquarters from Chicago to Arlington, Va., and would be developing a research and technology hub in northern Virginia. 

“We are excited to build on our foundation here in Northern Virginia. The region makes strategic sense for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent,” Boeing President and CEO Dave Calhoun said in a statement. 

• The move brings Boeing closer to members of Congress who control the flow of federal dollars to the aerospace giant.  
• Boeing is the latest major company to move to Arlington, following in the footsteps of Amazon, which is building its second headquarters there.  

The Hill’s Caroline Vakil has more here. 

Good to Know

The Hill put together a timeline of how the COVID-19 ravaged the U.S. economy and where it is now. 

Since the initial onslaught of measures that crippled the economy, the U.S. has slowly been working to restore the pre-pandemic economy, but as businesses have come back and the public has moved toward living with the virus, inflation has skyrocketed and presented new threats. 

Here’s what else we have our eye on: 

• The Department of Energy announced Wednesday it will solicit bids to buy 60 million barrels of oil to help start to replenish the record release from the Strategic Petroleum Reserve (SPR) that President Biden approved earlier this spring to address high gas prices.
• The Federal Trade Commission (FTC) would regain its ability to obtain monetary relief for victims of illegal scams as part of a new bill introduced by Senate Democrats on Wednesday night. 
• A group of Senate Democrats and Sen. Bernie Sanders (I-Vt.) have called for higher wages and better benefits for Senate dining workers, who are negotiating their first unionized contract.  
  
  

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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