Fed Signals Rate Hike, Stocks Abandon Early Gains
(MENAFN- Baystreet.ca) Fed Signals Rate Hike, Stocks Abandon Early Gains
The Dow Jones Industrial Average fell in volatile trading Wednesday, after Federal Reserve Chairman Jerome Powell suggested the central bank has plenty of room to raise interest rates before it would harm the economy.
The 30-stock index forfeited earlier gains and sagged 129.64 points to 34,168.09. The Dow was up more than 500 points at one point, but rolled over after the Fed's update.
The S&P 500 dawdled 6.52 points to 4,349.93.
The NASDAQ stayed just ahead of breakeven by 2.82 points to 13,542.12.
Stocks came off their highs and Treasury yields surged after Powell said at a press conference there was“quite a bit of room” to raise interest rates before it would hurt the labor market. Powell also said prices could
All three major indexes are decidedly negative in January. The NASDAQ is in correction territory, down more than 16% from its intraday high and off 13% for the month. The S&P 500 is down more than 8% to start the year and nearly 10% off its high.
Meanwhile, investors digested a strong quarterly report from Microsoft and other corporate earnings results.
Shares of Microsoft rose 2.9% after the company issued better-than-expected quarterly revenue guidance. The report boosted the major indexes and the tech sector earlier in the session before the Fed update.
On the downside, Boeing fell 4.9% after the aircraft maker reported positive cash flow for the first time since 2019, but it took a $3.5 billion pre-tax charge on its 787 Dreamliner program.
Prices for 10-year Treasurys were sharply lower, raising yields to 1.87% from Tuesday's 1.78%. Treasury prices and yields move in opposite directions.
Oil prices gained $1.48 to $87.09 U.S. a barrel.
Gold prices tumbled $36.00 to $1,816.50 U.S. an ounce.
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