U.S. stocks ended sharply lower on Wednesday over concerns on Wall Street of higher interest rates, but Peter Kenny, a senior market strategist for the Global Markets Advisory Group, remained optimistic the markets will rebound in March, a historically strong-performing month for the economy.
The Dow Jones Industrial Average dropped 380.83 points, or 1.5%, to 25,029.20. The S&P 500 Index fell 30.45 points, or 1.11%, to 2,713.83, and the Nasdaq Composite slipped 57.35, or 0.78%, to 7,273.01. February marks the worst month for the Dow and S&P 500 since January 2016.
The sudden return of volatility to Wall Street comes ahead of Federal Reserve Chair Jerome Powell’s second appearance on Capitol Hill this week. Powell testified Tuesday before the House Financial Services Committee on the outlook for inflation, saying he expects to see it rise.
He also signaled that, despite Fed plans for three rate hikes in 2018, rising inflation could prompt the bank to be even more aggressive. He will appear before the Senate Banking Committee on Thursday.
Kenny told FOX Business’ Liz Claman that he anticipates inflation fears will recede in March as the interest rates “settle back in,” and predicted the month would end positively for stocks. But investors who haven’t exited the markets yet should wait until they climb back to where they were prior to the sell-off, Kenny suggested.
“If you’re not out of the market, or you haven’t sold your positions, this is not the time to do that,” he said. “We’re probably going to see some weakness in the overnight markets, and we’re probably going to see some weakness tomorrow.”