NEW YORK: As investors changed course after taking into account the potential that the US Federal Reserve would delay beginning interest rate reductions, US equities closed down.
After statistics last week revealed that services activity was strong in January as well as solid job growth traders are closely watching Fed officials’ remarks this week particularly Chair Jerome Powell on Tuesday.
“People have to reevaluate the prognosis for the Fed and the economy after the shocking employment data. It would be fascinating to watch if Powell’s transition from hawk to dove continues tomorrow “Brian Jacobsen, a senior investment strategist at Allspring Global Investments, said.
According to U.S. Treasury Secretary Janet Yellen, the country may escape a recession as long as the job market continues to be robust and inflation is on the down.
Following a decline in 2022, U.S. stocks saw a significant recovery in 2023, driven by mega cap growth stocks and fueled by fleeting optimism that the Fed would scale down its hawkish rate rises, which in turn may lessen pressure on market prices.
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The benchmark rate is now expected to peak at 5.1 percent by July, in keeping with what the majority of policymakers have consistently supported.
A four-week high in yield was reached on the 10-year U.S. Treasury note as advances continued.
The Nasdaq Composite down 119.51 points, or 1%, to 11,887.45, while the S&P 500 lost 25.44 points, or 0.62 percent to 4,111.04. The Dow Jones Industrial Average finished down 35.85 points, or 0.11 percent at 33,890.16.
11.17 billion shares were traded on American markets, down from the 11.858 billion average for the whole session for the previous 20 trading days.
Tyson Foods Inc. dropped 4.6 percent after missing analysts’ expectations for revenue and earnings for the most recent quarter.
On its $16.9 billion bid for Australian rival Newcrest Mining Ltd to create a massive global gold company, miner Newmont Corp saw its stock drop by 4.5%.
Contrary to the general trend, Tesla Incincreased 2.5% following a U.S. jury’s decision on Friday that Chief Executive Elon Musk and his business were not liable for deceiving investors when Musk tweeted in 2018 that he had “funding secured” to take the electric-vehicle manufacturer private.
