NEW YORK: Wall Street stocks finished mixed on Wednesday (June 14), after the Federal Reserve (Fed) maintained current interest rates but signalled plans for additional rate increases.
Trading was choppy and volume was heavy after the rate-setting Federal Open Market Committee (FOMC) reacted to a stronger-than-expected economy and a slower decline in inflation.
The Dow Jones Industrial Average fell 232.79 points, or 0.68%, to 33,979.33, the S&P 500 gained 3.58 points, or 0.08%, to 4,372.59 and the Nasdaq Composite added 53.16 points, or 0.39%, to 13,626.48.
The US central bank, as expected, opted to hold its benchmark lending rate between 5% and 5.25%. But forecasts from policymakers indicated strong support for two more increases in 2023.
Major indices tumbled just after the policy statement was released but recovered somewhat later during Fed chair Jerome Powell’s press conference.
He described inflation as still too high, but added that the central bank had made no decisions yet about its July meeting or subsequent gatherings.
Oanda’s Edward Moya characterised the decision as a “very hawkish skip”, adding that “the Fed is clearly worried that inflation might not be able to come all the way down to target”.
But Oxford Economics rated the Fed’s posture on additional interest rate increases as likely a “bluff”, according to a note.
“If it isn’t a bluff, and the Fed continues to hike, that would increase the odds that the central bank pushes the economy into a recession,” Oxford Economics added in the note.
Analysts noted that the stock market had rallied ahead of Wednesday's announcement in expectation of a Fed pause. That had set the market up for a potential pullback when the news was disclosed.
Futures markets currently are betting on a small interest rate increase in July, but not one after that.
“Some people were expecting that the Fed would actually pause this month, but also not raise rates anymore,” said Sam Stovall, chief investment strategist at CFRA Research. “However, it does seem as if the FOMC members have become even more hawkish since the last meeting, and I think that has taken investors by surprise.”
Traders now see a 63% chance the central bank will raise interest rates in July, up from 60% earlier on Wednesday, according to the CME Fedwatch tool.
Shares of Tesla Inc dipped 0.74%, putting the brakes on the electric car maker's 13-session streak of gains, its longest ever. Over US$43 billion worth of Tesla shares were traded, more than any other stock in the S&P 500.
Heavyweight chipmakers Nvidia and Broadcom both rallied more than 4% and closed at their highest levels ever, lifting the Nasdaq and S&P 500. The Philadelphia semiconductor index jumped 1.5%, bringing its gain in 2023 to 48%. – AFP, Reuters
Source: The Sun Daily
A word from our sponsor:
Need Help With Your Personal Finance / Money Issue or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com
Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving
Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog
Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101
Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy
No comments:
Post a Comment