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Stock Market Recap: Dow Closes Down Following Powell Speech

Stock Market Recap: Dow Closes Down Following Powell Speech

Stock Market latest update saw The Dow registered a decline on Thursday as Federal Reserve Chairman Jerome Powell delivered remarks that diminished expectations of imminent interest rate cuts. Signaling that the Fed not currently inclined to pursue a policy of reducing rates.

At 4:00 PM Eastern Time (9:00 PM Greenwich Mean Time), the Dow Jones Industrial Average dropped by 220 points. Representing a 0.7% decrease. Simultaneously, the S&P 500 recorded an 0.8% decline, and the NASDAQ Composite experienced a 0.9% drop. This caused both indexes to end their respective winning streaks of eight and nine consecutive days.

Powell’s Remarks on Monetary Policy and Stock Market Shifts

Stock Market shifts on the fact that Federal Reserve Chair Jerome Powell conveyed on Thursday that the Federal Open Market Committee lacks full confidence in having adopted a sufficiently restrictive monetary policy to effectively combat inflation and bring it back in line with the Fed’s 2% target.

Powell maintained a measured tone by reiterating the central bank’s commitment to a cautious approach in future monetary policy decisions. He also emphasized that “if the need arises to further tighten policy, we will not hesitate to do so.” This declaration contradicted recent optimism that the Federal Reserve had completed its cycle of interest rate hikes.

Powell’s statements prompted traders to adjust their expectations, postponing their forecasts for potential interest rate cuts. The first expected rate cut is now envisioned for June, rather than the previously anticipated timeframe of May next year.

Stock Marekt Higlights: Tesla Falls 6% on HSBC Sell Rating, Citing Execution Delays and CEO Risk

Tesla Inc (NASDAQ: TSLA) led a downturn in consumer stocks. Experiencing a 6% decline after HSBC issued a sell rating on the electric vehicle maker. The rating was attributed to concerns about potential delays in the company’s execution of its ideas.

HSBC specifically pointed out the considerable risk associated with Tesla CEO Elon Musk’s prominent role within the company and assigned a $146 price target for the stock.

Treasury Yields Climb: 2-Year and 30-Year Rates Up Despite Weak Demand in Auction

Treasury yields maintained their ascent, particularly the 2-year Treasury yield. Which saw an increase of around 12 basis points, reaching 4.64%.

Meanwhile, the yield on the United States 30-Year Treasury also rose by 12 basis points in response to the results of a $24 billion 30-year treasury auction. The auction received less demand than initially expected, and the resulting auction yield of 4.769% exceeded the pre-sale level by 5.3 basis points, indicating a notable lack of interest in the offering.

Also Read: Jerome Powell speech in parallel with the dollar’s rise

Becton Dickinson (NYSE: BDX) – 9% Decline Amidst Bleak Guidance; Healthcare Sector Under Pressure

Becton Dickinson and Company (NYSE: BDX) saw a decline of over 9%, putting downward pressure on the broader healthcare sector. This drop was prompted by the company’s less optimistic annual guidance, which overshadowed its quarterly revenue that surpassed expectations.

The company’s outlook for earnings per share (EPS) in 2024 ranged from $12.70 to $13 per share, with revenue anticipated to fall between $20.1 billion and $20.34 billion. These projections fell short of analysts’ estimates, which had predicted EPS of $13.52 on revenue of $20.36 billion.

Additionally, other healthcare stocks such as Eli Lilly and Company (NYSE: LLY), AbbVie Inc (NYSE: ABBV), and Gilead Sciences Inc (NASDAQ: GILD) also contributed to the sector’s drag.

Stock Market Shifts: Oil Prices Recover Slightly

Oil prices showed a slight rebound on Thursday, attempting to recover from their lowest levels in over three months. However, concerns lingered regarding diminishing demand in the world’s two largest economies, China and the United States.

Earlier on Thursday, data indicated that China, the leading global oil importer, reverted to disinflationary conditions in October.

Furthermore, the American Petroleum Institute, an industry body, disclosed that U.S. crude oil stocks witnessed a substantial increase of nearly 12 million barrels last week. If confirmed by official data, this would represent the largest build since February.

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