NEW YORK: Wall Street stocks finished a choppy session mostly lower on Wednesday (Feb 22) as markets assessed the significance of minutes from the last Federal Reserve (Fed) meeting, which revealed that nearly all policymakers favoured a smaller interest rate hike.
But since that Feb 1 meeting, January inflation and employment data have suggested that pricing pressures remain acute, stoking fears that the US central bank’s rate-increasing cycle could be prolonged.
Oxford Economics anticipates that the Fed will again raise rates by 25 basis points in both March and May, while adding that “the risk, given the economic and inflation data released since the last meeting, is that the Fed raises rates further”, according to a note on Wednesday.
The Dow fell 84.5 points, or 0.26%, to 33,045.09, the S&P lost 6.29 points, or 0.16%, to 3,991.05 and the Nasdaq added 14.77 points, or 0.13%, to 11,507.07.
Despite the declines experienced by the S&P and the Dow, the falls were not as sharp as Tuesday’s, which was the worst daily performance posted by markets in 2023.
Stocks were broadly steady in the wake of the minutes’ release, after choppy trading prior to their publication.
However, a general weakening in the final hour of trading pushed both the S&P 500 and the Dow Jones Industrial back into the red. The Nasdaq Composite managed to scrape back into positive territory though in the final moments, ensuring its own losing streak was snapped at three.
“It’s clear that the Fed is determined to keep on with its rate-hiking campaign, and they are going to do it even as recession risks grow,” said Ed Moya, senior market analyst at Oanda.
“And that’s why, after digesting the minutes, you saw markets softening a little bit.”
For the S&P, it is now on its longest negative run since mid-December, and finished below 4,000 points for the second straight day: a level not recorded since Jan 20.
“We’ll see what happens with equities, but I think downward momentum should lead over the next couple of weeks,” said Moya.
Among individual companies, Palo Alto Networks jumped 12.5% as the cybersecurity company lifted full-year targets following better results than anticipated.
Intel fell 2.3% after slashing its dividend by around two thirds so that it can finance the “critical investments needed” to execute its transformation during a period of macroeconomic uncertainty. – AFP, Reuters
Source: The Sun Daily
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