The Dow Jones Industrial Average fell 0.8% and closed near session lows on Wednesday after the Fed raised interest rates by 25 basis points and raised the effective rate to 5%-5.25% signaling a pause in rate hikes.
X
The S&P 500 fell 0.7% while the Nasdaq gave up all of its early gains and fell 0.5%. Small cap Russell 2000, however, bucked the trend and showed a gain of 0.4%. Innovative IBD 50 (fifty) gained 0.4% despite its price drop from advanced micro devices (AMD).
Trading volume on the New York Stock Exchange was lower and on the NASDAQ higher compared to the same time on Tuesday.
Crude Oil fell almost 4% to $68.90 a barrel. The yield on the benchmark 10-year Treasury note fell about 4 basis points, to 3.40%.
On Wednesday, the Fed stated that “in determining the extent to which additional policy stabilization to return inflation to 2% over time may be appropriate, the committee will take into account the cumulative tightening of monetary policy, the delays with which monetary policy affects the economy, activity and inflation and economic and financial developments.
At the press conference, Fed Chairman Jerome Powell signaled the need for a “continued assessment” meeting by meeting as events unfolded. Inflation remains well above the 2% target while the labor market continues to rise.
Wednesday’s ADP report showed 296,000 job increases in April, well above expectations of 143,000. The ISM Services index rose to 51.9, showing that part of the economy was in expansion mode. Both figures reinforce the case for rate hikes after today.
However, continued weakness in regional banks and concerns about the debt ceiling present risks to the economy. On Tuesday, Treasury Secretary Janet Yellen said the economy could reach the debt ceiling as early as June 1.
the CME FedWatch tool It only shows a probability of 15.5%, up another 25 basis points in June.
According to Jeffrey Roach, chief economist at LPL Financial, investors will likely see a peak in the fed funds rate. And with inflation still slowing and the labor market slumping, investors should expect some interest rate cuts in the latter half of the year.
Friday’s jobs report may be the next indicator of future interest rate policy.
Stocks are moving today
AMD shares fell below the 50-day line after earnings late Tuesday. The chipmaker beat estimates but cut its second-quarter revenue forecast. However, AMD expects better growth in the second half as the PC and server markets strengthen. The stock fell more than 8% from the buy point at 89.04, which caused a sell signal.
Technology leader Dow Jones and rival AMD Intel (INTC) rose nearly 3% on Wednesday after testing the 200-day moving average.
Uber (Uber) from the bottom of the cup with entry at 37.68, according to IBD MarketSmith chart analysis. the IBD Leaderboard play options and defect 50 The stock rose for the sixth day in a row, a streak that included this week’s earnings report.
Eli Lilly (LLY), hitting an all-time high, after the drugmaker said its experimental Alzheimer’s treatment reduced cognitive decline in certain cases.
Basic and main (CNM) from the base of a cup with a purchase point of 26.73. Volume was 47% above average, and the RSI line is at new highs.
Logistics company XPO (XPO), which reports earnings on Thursday, tried to break out at 45.16 but closed below the entry point. Inspire Medical Systems (INSP) broke briefly from a cup with a handle but closed below a buy point at 277.28. The company announced first-quarter results Tuesday.
Among the oil plays, coincidence (Shell) And ConocoPhillips (policeman) with dividends due on Thursday.
play lithium Levent (LTHM) above the 50-day line after it reported its earnings late Tuesday. shares Albemarle (ALB) before earnings later today. The stock is still well below the 50-day line.
Sonron (Being) And etsy (ETSY) rose after hours after earnings while Qualcomm (QCOM) on the weak outlook.
Dow focus on stocks
apple (AAPL) with dividends due on Thursday. Stocks are extended and are facing potential resistance around 176.
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