U.S. Stocks Move Mostly Lower Amid Ongoing Interest Rate Worries
17 Abril 2024 - 5:20PM
IH Market News
After showing a lack of direction early in the session, stocks
have moved mostly lower over the course of the trading day on
Wednesday. The major averages have all moved to the downside after
ending the previous session narrowly mixed.
The major averages have climbed well off their worst levels in
recent trading but are currently all in the red. The Nasdaq
(NASDAQI:COMP) is down 116.76 points or 0.7 percent at 15,748.49,
the S&P 500 (SPI:SP500) is down 19.49 points or 0.4 percent at
5,031.92 and the Dow (DOWI:DJI) is down 24.12 points or 0.1 percent
at 37,774.85.
The weakness that has emerged on Wall Street may partly reflect
ongoing concerns about the outlook for interest rates following
yesterday’s remarks by Federal Reserve Chair Jerome Powell.
During a moderated discussion with Bank of Canada Governor Tiff
Macklem, Powell suggested rates are likely to remain higher for
longer amid a “lack of progress” toward reaching the central bank’s
inflation goal.
“Recent data shows solid growth and continued strength in the
labor market but also a lack of further progress so far this year
on returning to our 2 percent inflation goal,” Powell said.
Fed officials, including Powell, have repeatedly stated they
need “greater confidence” inflation is slowing before they consider
cutting interest rates.
“The recent data have clearly not given us greater confidence
and instead indicate that it’s likely to take longer than expected
to achieve that confidence,” Powell said. “That said, we think
policy is well positioned to handle the risks that we face.”
The Fed chief’s remarks come as recent data showing sticky
inflation along with continued economic strength have led to
reduced expectations of a rate cut in June.
According to CME Group’s FedWatch Tool, the chances of a 25
basis point rate cut in June have tumbled to 16.4 percent compared
to 55.2 percent just a week ago.
Among individual stocks, shares of Travelers (NYSE:TRV) have
come under pressure after the insurance giant reported weaker than
expected first quarter results.
Transportation and logistics company J.B. Hunt (NASDAQ:JBHT) is
also seeing significant weakness after reporting first quarter
results that missed analyst estimates.
On the other hand, shares of United Airlines (NASDAQ:UAL) are
moving sharply higher after the airline reported a much narrower
than expected first quarter loss.
Sector News
Despite the weakness being shown by the broader markets, airline
stocks continue to see substantial strength following United’s
upbeat results, with the NYSE Arca Airline Index soaring by 3.5
percent after ending Tuesday’s session at a two-month closing
low.
Considerable strength has also emerged among utilities stocks,
as reflected by the 1.6 percent gain being posted by the Dow Jones
Utility Average. The average is bouncing off its lowest closing
level in well over a month.
Gold stocks also continue to turn in a strong performance
despite in a decrease by the price of the precious metal, with the
NYSE Arca Gold Bugs Index climbing by 1.5 percent.
Meanwhile, semiconductor stocks remain under pressure on news of
disappointing first quarter sales by Dutch chip equipment maker
ASML, dragging the Philadelphia Semiconductor Index down by 2.3
percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region turned in a mixed performance during trading on Wednesday.
Japan’s Nikkei 225 Index slumped by 1.3 percent, while China’s
Shanghai Composite Index surged by 2.1 percent.
Meanwhile, European stocks gave back ground after an early rally
but still closed mostly higher. While the French CAC 40 Index
climbed by 0.6 percent, the U.K.’s FTSE 100 Index rose by 0.4
percent and the German DAX Index close just above the unchanged
line.
In the bond market, treasuries have shown a strong move back to
the upside after moving sharply lower over the two previous
sessions. Subsequently, the yield on the benchmark ten-year note,
which moves opposite of its price, is down by 6.1 basis points at
4.598 percent.
SOURCE: RTTNEWS
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