U.S. Stocks Move Sharply Lower Ahead Of Powell Testimony
05 Março 2024 - 6:28PM
IH Market News
Following the modest pullback seen during the previous session,
stocks showed a more substantial move to the downside during
trading on Tuesday. The major averages all moved notably lower,
with the tech-heavy Nasdaq (NASDAQI:COMP) showing a particularly
steep drop.
The major averages climbed off their worst levels going into the
close but remained firmly negative. The Nasdaq plunged 267.92
points or 1.7 percent to 15,939.59, the S&P 500 (SPI:SP500)
tumbled 52.30 points or 1.0 percent to 5,078.65 and the Dow
(DOWI:DJI) slumped 404.64 points or 1.0 percent to 38,585.19.
The weakness on Wall Street came as traders continued to cash in
on recent strength in the markets, which lifted the S&P 500 and
the Nasdaq to record closing highs last Friday.
Uncertainty about the outlook for interest rates also weighed on
the markets ahead of congressional testimony by Federal Reserve
Chair Jerome Powell
Powell is due to testify before the House Financial Services
Committee on Wednesday and the Senate Banking Committee on
Thursday.
The Fed chief is likely to reiterate recent comments stressing
the central bank needs greater confidence inflation is slowing
before cutting interest rates.
The next monetary policy meeting is scheduled for March 19-20,
with the Fed widely expected to leave interest rates unchanged.
In U.S. economic news, a report released by the Institute for
Supply Management showed U.S. service sector growth slowed by
slightly more than expected in the month of February.
The ISM said its services PMI fell to 52.6 in February after
climbing to 53.4 in January. While a reading above 50 still
indicates growth, economists had expected the index to show a more
modest decrease to 53.0.
The Commerce Department also released a report showing a steep
drop in new orders for U.S. manufactured goods in the month of
January.
Sector News
Software stocks showed a substantial move to the downside on the
day, resulting in a 3.4 percent nosedive by the Dow Jones U.S.
Software Index down.
Among software stocks, GitLab (NASDAQ:GTLB) plummeted by 21.0
percent after the company reported better than expected fourth
quarter results but provided disappointing guidance.
Significant weakness was also visible among semiconductor
stocks, as reflected by the 2.1 percent slump by the Philadelphia
Semiconductor Index.
Commercial real estate, housing and transportation stocks also
saw notable weakness, while banking stocks showed a strong move to
the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower during trading on Tuesday. Japan’s Nikkei
225 Index closed just below the unchanged line, while Hong Kong’s
Hang Seng Index plunged by 2.6 percent.
Meanwhile, the major European markets turned in a mixed
performance on the day. While the U.K.’s FTSE 100 Index inched up
by 0.1 percent, the German DAX Index edged down by 0.1 percent and
the French CAC 40 Index fell by 0.3 percent.
In the bond market, treasuries moved notably higher, more than
offsetting the pullback seen in the previous session. Subsequently,
the yield on the benchmark ten-year note, which moves opposite of
its price, slid 8.2 basis points to 4.137 percent.
Looking Ahead
Powell’s congressional testimony is likely to be in the
spotlight on Wednesday, although reports on private sector
employment and job openings are also likely to attract attention
along with the Fed’s Beige Book.
Source: RTTNEWS
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