Statements from US Federal Reserve President Jerome Powell’s speech weighed on the US stock exchanges on Wednesday. Powell reiterated that there are signs pointing to further interest rate hikes through the end of the year and that it will take a long time to bring inflation down to the desired target of 2 percent. As a result, the Dow Jones Industrial fell 0.45 percent to 33,902 points in early trading, continuing its consolidation from the past two trading days. The S&P 500 also fell by 0.54 percent to 4365 points, while the tech-heavy NASDAQ 100 dropped 1 percent to 14,920 points, with technology stocks being particularly vulnerable to rising interest rates.
Just a week ago, the Federal Reserve had paused interest rates but hinted at the possibility of further hikes. The determination of the Fed to combat high inflation surprised the markets, and there are currently no new monetary policy insights from Powell, according to stockbrokers.
Among individual stocks, FedEx stocks came into focus as a disappointing fourth quarter for Deutsche Post’s competitor caused the price to drop by 3.6 percent in early trading. However, the stocks later recovered some of the losses. FedEx is now planning to cut costs. United Parcel Service (UPS) also experienced a 1.3 percent loss.
Tesla stocks also drew attention as investors took profits despite positive news from China. The shares had risen by almost 60 percent since mid-May but lost around two percent. In China, tax breaks for the purchase of new electric cars will be extended until 2027 to boost sales and production in the world’s largest market for electric vehicles.
Intel saw a decline of over two percent as the chip manufacturer plans to sell around 20 percent of its IMS division to financial investor Bain Capital. However, investors had previously made profits at Intel, with shares increasing by 30 percent since the end of May.
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Overall, the prospect of interest rate increases and the impact on various stocks have weighed on the US stock exchanges, leading to declines in major indices.
jerome powell testimony
Nasdaq composite dropped 0.64 percent to 14,673 points. The market reaction was a direct result of the statements made by US Federal Reserve President Jerome Powell during his speech on Wednesday. Powell expressed his belief that there will likely be more interest rate hikes throughout the rest of the year, and that achieving the desired inflation target of 2 percent will be a long-term endeavor. These remarks led to a decline in the Dow Jones Industrial, which dropped 0.45 percent to reach 33,902 points in early trading. This decline continued the consolidation trend observed in the past two trading days. Similarly, the S&P 500 fell by 0.54 percent to 4,365 points, while the tech-heavy Nasdaq composite experienced a 0.64 percent decline, settling at 14,673 points.
The US stock markets hold their breath as they react to the Federal Reserve President’s speech on interest rates and inflation. Investors anxiously analyze the potential impact of these announcements on the market’s volatile landscape.
This article highlights the significant impact of the Federal Reserve President’s speech on US stock markets. Interest rate and inflation concerns have a profound influence on investor sentiment, and understanding the reactions of the stock markets is crucial for investors.