© Reuters. New York Stock Market Situation: Dow Jones closes down 284.85 points, investors sell to take profits – not confident in Fed interest rates.
InfoQuest – The Dow Jones New York Stock Exchange Index closed lower on Wednesday (Jan. 3) as investors took profits after the market rose strongly last year. In addition, the trading environment was also pressured by the release of bank meeting minutes. The US Federal Reserve (Fed) has not helped investors gain confidence in the Fed’s interest rate direction.
The Dow Jones Industrial Average closed at 37,430.19 points, down 284.85 points or -0.76%, the S&P 500 Index closed at 4,704.81 points, down 38.02 points or -0.80%, and the Nasdaq Index closed at 14,592.21 points, down 173.73 points or -1.18%.
The Fed Board released minutes from its December 12-13, 2023 meeting, indicating that Fed directors are more confident that U.S. inflation is within control and that inflation risks returning to an upward trend. There are starting to be less. At the same time, Fed directors are increasingly concerned about the potential economic impact of the Fed tightening its monetary policies too much.
The meeting report also states that Federal Reserve officials predict a possible rate cut in 2024, but have given no clear indication of when the cut will occur.
“The market needs clarity on when and how much the Fed will cut interest rates,” said Jason Betz, an analyst at Ameriprise Financial. But the Fed did not mention it in the minutes of this meeting. Sending unclear signals like this makes investors worried and sell stocks. As for other factors that caused the market to fall last night, This comes from investors taking profits after the market rose strongly in 2023 and from investors adjusting their positions in the new year.”
Investors are increasingly concerned about the direction of the Fed’s interest rates. When Mr. Thomas Barkin, President of the Richmond Fed Sending a signal to move forward with raising interest rates. He said the Fed still has the option to raise interest rates. Because even though the Fed has made progress in slowing down inflation, But there remains a risk that the Fed’s mission to stem inflation may not be over.
CME Group’s FedWatch Tool indicates that investors expect the Fed to hold interest rates steady at this year’s January meeting. Meanwhile, investors give 67% weight to the Fed to cut interest rates by 0.25% at its March meeting. This is down from the previous survey where investors gave more than 70% weight.
Technology stocks with high market caps and interest rate sensitivity continuously falling After US government bond yields rebounded above 4%, with Indian stocks, Apple stocks and Tesla stocks all closing in negative territory.
WTI oil prices rose more than 3%, supporting energy stocks. But airline groups fell. This is due to concerns that the increase in oil prices will cause the cost of aircraft fuel to increase.
Investors keep an eye on the U.S. non-agricultural employment numbers release on Friday. While analysts predict that Employment figures will increase by just 163,000 jobs in December. After adding 199,000 jobs in November And the unemployment rate is expected to increase to 3.8% in December from 3.7% in November.
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2024-01-04 06:11:37
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