[US Stock Market Movement] Diodes plummeted on October 7: Fed hawkish stance, semiconductor sector under pressure, and retreat from highs

SpaceX (SPCX.US) has raised significant debt, sparking market concerns and a noticeable increase in credit risk.

U.S. President Trump, when asked about mortgage rates on Wednesday, stated that the Federal Reserve Board "wants to see the country perform badly." The U.S. 30-year mortgage rate rose to its highest level in nearly three years last week. Trump described Fed Chairman Waller as "very outstanding," but added that other members of the Fed Board "seem to want to see the country perform badly, because I think interest rates should be coming down." U.S. Treasury Secretary Bensent, who was with Trump in the Oval Office, said that inflation is high due to energy shocks. "Therefore, once we get through this Iran conflict and the energy market is adequately supplied, inflation will fall back toward the Fed’s target, and both mortgage rates and the 10-year U.S. Treasury yield will come down."

According to the minutes released today, Federal Reserve officials expect to raise interest rates again before the end of this year to curb inflation, which has remained above target levels for more than five consecutive years. However, the minutes did not indicate when policymakers expect to hike rates, only implying that persistently high prices and a stable labor market could prompt the Fed to implement a second rate increase this year. The minutes stated: “Regarding the monetary policy outlook after this meeting, most participants judged that it could be appropriate to raise the target range for the federal funds rate again by the end of the year.” “However, participants emphasized that they would approach each meeting with an open mind, and decisions at future meetings will depend on new information as well as its impact on the economic outlook and balance of risks.” The discussion at the September meeting showed that officials see ongoing risks of inflation remaining stubbornly high, while the labor market is “close to full employment,” and overall economic growth has accelerated. The minutes noted: “Many participants emphasized that, from a risk management perspective, a prudent approach would be to raise the path of the federal funds rate target range, thus providing insurance against the risk that inflation will remain above target due to stronger-than-expected demand or further adverse supply shocks.”