Live Stock Market News Updates: Stocks Fall as Investors Await Fed Decision, Powell Signals

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US stocks slumped on Wednesday as Wall Street braced for a highly anticipated policy announcement from the Federal Reserve and comments from Chairman Jerome Powell.

The US central bank is widely expected to raise its key short-term interest rate by 0.75% for the fourth time in a row after it concludes its two-day meeting at 2 pm ET.

The S&P 500 (^GSPC) fell 0.6% in midday trading, while the Dow Jones Industrial Average (^DJI) lost around 0.2%. The Nasdaq Hi-Tech Composite (^IXIC) fell 1%.

Treasury yields advanced alongside stocks. The benchmark 10-year note held above 4%, while rate-sensitive two-year yields hovered around 4.5%.

On the economic data front, US private payrolls saw an unexpected rise in October, according to ADP’s national employment report, which serves as an imperfect backdrop for the government’s monthly employment report to be released. Will post on Friday. Wednesday’s data suggests the labor market remains tight despite the Fed’s efforts to rein in growth as it fights inflation, suggesting aggressive rate hikes may continue.

Investors will tune in to Powell’s press conference at 2:30 p.m. ET after the rate decision, which will come along with economic projections from policymakers and the latest dot plot showing the forecast. of each member for the US short-term interest rate.

“The focus will be on what comes next, and we expect Chairman Powell to hint that the Federal Open Market Committee will likely cut the pace to 50 basis points in December,” Goldman Sachs economists led by Jan Hatzius said in a note. recent.

Any signals from the central bank about a possible easing in the pace of tightening will serve as a tailwind for major indices, which closed higher last month on expectations of a policy change stoked by talk by some officials suggesting a reduction in rate hikes and global concerns that tightening could trigger financial instability. But some strategists have dismissed the idea that a change in the Fed’s path is imminent, with inflation and payrolls still high.

“As of now, inflation and labor market criteria have not been met, so Mr. Powell cannot pre-announce any intention to switch to slower rate increases without contradicting what he said just six weeks ago.” said Ian, chief economist at Pantheon Economics. Shepherdson said in emailed comments. “Evidence of pressure easing in the pipeline is abundant, but it has yet to reach the numbers that the Fed chairman has clearly said on multiple occasions are more important, namely actual core inflation data.” .

WASHINGTON, DC – OCTOBER 3: US Federal Reserve Board Chairman Jerome Powell listens during a meeting with the US Treasury Department on October 3, 2022 in Washington, DC . (Photo by Anna Moneymaker/Getty Images)

On the corporate side, Estée Lauder (EL) shares sank more than 7% after the company cut its full-year forecast. The cosmetics maker cited currency headwinds, lockdowns in China and some US retailers pulling its cosmetics and fragrances from their shelves amid concerns about slowing demand.

Shares of Paramount (PARA) fell as much as 12% after the company reported a hit to content investment earnings and said weakness in ad revenue also weighed on the quarter.

Shares of Advanced Micro Devices (AMD) rose 3% after the chipmaker reported better-than-feared earnings results, even as fourth-quarter earnings guidance missed Wall Street estimates.

The dating app Tinder is displayed on a mobile phone in this illustration taken on September 1, 2020. Picture taken on September 1, 2020. REUTERS/Akhtar Soomro/Illustration

The dating app Tinder is displayed on a mobile phone in this illustration taken on September 1, 2020. Picture taken on September 1, 2020. REUTERS/Akhtar Soomro/Illustration

Shares of Match Group (MTCH), owner of Tinder, Hinge and OkCupid, advanced 5% after financials showed earnings that beat analysts’ estimates and the company promised to rein in costs to prepare for subdued economic expectations.

Shares of Mondelez International (MDLZ) advanced 2% after the Oreo maker raised its full-year sales and earnings outlook and indicated shoppers continue to enjoy snacks and drinks despite pressure from inflation.

Meanwhile, shares of Airbnb (ABNB) fell nearly 10% after the company warned of slowing growth in the fourth quarter as consumers dislike higher-cost rentals and prefer urban and cross-border destinations. .

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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