The Dow Jones Industrial Average closed more than 500 points on Wednesday (Nov 2) after Federal Reserve Chairman Jerome Powell signaled that the Fed would move more aggressively. Because inflation is still at a very high level.
The Dow Jones Industrial Average closed at 32,147.76, down 505.44 or -1.55%, the S & P500 closed at 3,759.69, down 96.41 or -2.50%, and the Nasdaq closed at 10,524.80, down by 366.05 or -3.36%.
top Jump New York Stock Exchange After Fed Board of Directors voted to raise short-term interest rate from 0.75% to 3.75-4.00%, in line with expectations of the market. and signaled that it would slow interest rate hikes at the December meeting
But the market subsequently fell. After Mr. Powell announced after the meeting that “The Fed’s mission to fight inflation is not over. Because inflation is still at a very high level. And the data the Fed received since the last meeting also indicates this. The Fed may have to raise interest rates to a higher level than previously expected. I think it is too early to talk about ending the rate hike cycle ”.
In addition, Mr. Powell said, “The US economy still has a chance to avoid a recession at a time when the Fed raises rates to curb inflation. But the likelihood that the US economy will gradually slow down. or the soft landing is less because the inflation pressures are slowing down.
The Fed’s latest rate hike announcement comes after the US released strong jobs data. This includes job openings (JOLTS), which increased from 437,000 to 10.7 million in September. Contrary to analysts’ expectations for a drop of 9.85 million, JOLTS is one of the data the Fed uses to determine monetary policy and interest rates.
In the latest workforce data on Wednesday, Automatic Data Processing, Inc. (ADP) said private sector jobs increased by 239,000 in October. It was higher than analysts’ estimates of 195,000 from 192,000 in September.
Interest rate sensitive stocks fell dramatically. This includes technology and luxury goods. Amazon fell by 4.82%, Netflix by 4.80%, Meta Platforms by 4.89%, Tesla by 5.64%, Salesforce by 6.14% and Alphabet by 6.14%.
Luxury stocks include Capri Holdings, down 4.77%, Nike, down 3.7%, and Ralph Lauren, down 3.43%.
Boeing shares were up 2.81% as the company expects deliveries of 400-450 Boeing 737s next year, up from 375 this year, with cash flow of $ 3-5 billion next year. This is well above the $ 1.5-2.0 billion forecast for this year.
Investors are watching the release of non-farm payrolls for the month of October in the US on Friday. While analysts had predicted the number of jobs will increase by just 205,000 in October. after adding 263,000 jobs in September
