Stock markets tumble globally as Fed resets expectations: $400 billion wiped off SpaceX

Everything you need to know before you reach the office this morning.

The US Federal Reserve's decision to reset expectations has led to a global market tumble, with tech stocks bearing the brunt of the losses. SpaceX, a company valued at over $200 billion, saw $400 billion wiped off its value. The Fed's move has increased the expected cost of money, with interest rates potentially rising from the current 3.5% level. This shift has caught investors off guard, as most analysts had expected the Fed to hold interest rates steady.

The market turmoil will directly affect mortgage rates, making it more expensive for people to buy or refinance homes. As interest rates rise, the cost of borrowing increases, which can lead to higher monthly payments for homeowners. This can have a significant impact on household budgets, particularly for those with variable-rate mortgages. The increase in mortgage rates can also slow down the housing market.

The current market volatility is reminiscent of the 2018 market downturn, when the Fed's decision to raise interest rates led to a similar sell-off in tech stocks. Insiders know that the Fed's move is an attempt to curb inflation, which has been rising steadily over the past year. The Fed's decision is also influenced by the current state of the global economy, with trade tensions and slowing growth in major economies. Historical context suggests that the Fed's decision may be a precursor to a larger economic shift.

Investors should watch for the Fed's next meeting on March 15, when the central bank is expected to announce its decision on interest rates. The meeting will be closely watched, as it will provide clarity on the Fed's future plans. A report by the National Association of Realtors is also expected to be released next week, which will provide insight into the impact of rising interest rates on the housing market. Surprisingly, some analysts believe that the market turmoil may actually benefit companies like SpaceX in the long run, as higher interest rates can lead to increased investment in innovative technologies.