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Stock Market Today: Dow closes lower as Fed's Waller dents early rate-cut hopes

Published 01/15/2024, 09:46 PM
Updated 01/16/2024, 04:16 PM
© Reuters.

Investing.com -- The Dow closed lower Tuesday as investors digested a slew of earnings and a jump in Treasury yields after Fed Governor Christopher Waller downplayed the need for speed on rate cuts. 

By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average was down 231 points, or 0.6%, the S&P 500 fell 0.4% and the NASDAQ Composite dropped 0.2%.

Treasury yields climb as Fed Governor Waller says cools bets on early rate cuts

Federal Reserve Governor Christopher Waller said he expects the Fed to cut rates this year, but stressed that there was no need to the central bank to cut rates quickly as the economy remains in good shape. The remarks cooled some optimism for a cuts to begin in March, sending Treasury yields sharply higher.

The yield on the 10-year Treasury topped 4%, while the 2-year Treasury rose 9 basis points to 4.2%. 

"In many previous cycles [...] the FOMC cut rates reactively and did so quickly and often by large amounts,"  Waller said Tuesday. "[H]owever, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past," he added.

Banks continue to roll out earnings 

Goldman Sachs (NYSE:GS) rose nearly 1% after reporting better-than-expected fourth-quarter results as strength in equity sales and trading helped offset weakness at the Wall Street giant's core investment banking unit.

Morgan Stanley (NYSE:MS) reported mixed fourth-quarter results as earnings fell short of analyst expectations after profit was hurt by $535 million in charges. Its shares fell 4.2%.

PNC Financial Services Group Inc (NYSE:PNC), meanwhile, ended roughly flat after delivering a beat on the top and bottom lines, though the super regional bank also provided a soft outlook for 2024, forecasting revenue to be flat to down 2% from $21.5B in 2023.

Tesla dips as Elon demands more voting control to develop AI; Spirit Airlines plunges after Fed judge blocks JetBlue Airways purchase

Tesla (NASDAQ:TSLA) ended the day roughly unchanged after CEO Elon Musk said he would prefer to "build products outside of Tesla" unless the board increases his stake in the EV company to 25%, nearly double his current 13% stake.

The comments come as the Tesla board and Musk are awaiting the ruling on a lawsuit over his previous compensation before talks can begin on a new pay package.    

"[I]f Musk ultimately went down the path to create his own company (separate from Tesla) for his next generation AI projects this would clearly be a big negative for the Tesla story," Wedbush said in a Tuesday note, though added that board and Musk are likely to "resolve this issue over the next 3-6 months and ultimately all AI initiatives will be kept within Tesla."

Spirit Airlines Inc (NYSE:SAVE) fell 47% after a federal judge blocked JetBlue Airways' deal to purchase the company, citing antitrust concerns. The judge alleged that the JetBlue Airways (NASDAQ:JBLU) takeover of budget rival Spirit Airlines would be anticompetitive and increase airfares for consumers. 

Apple falls after court rejects App Store appeal, but chip stocks keep tech in green

Apple Inc (NASDAQ:AAPL) fell 1% after the US Supreme Court refused the tech giant's appeal that sought to overturn a lower court decision that would force the tech giant to make changes to its App Store policies.

The decision threatens to dent revenue from Apple's App store, which charges app developers a 30% commission for in-app purchases, as app developers would be allowed to provide alternative payment methods for consumers using their apps.

A jump in chip stocks, however, ensured tech stocks closed in the green, underpinned by rallies in chipmakers NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD), with Barclays lifting its price target on the latter to $200 from $120.

Energy stocks fall as oil prices swing amid Middle East tensions

Energy stocks were among the biggest decliners on the Wall Street as oil prices swung between gains and losses amid ongoing tensions in the Middle East including fresh attacks by Houthi rebels on cargo vessels in the Red Sea. Oil prices were also dragged lower by stronger dollar after Fed Governor Waller played down sooner rather later rate cuts. 

EQT Corporation (NYSE:EQT), Marathon Oil Corporation (NYSE:MRO), and ConocoPhillips (NYSE:COP) were among the biggest decliners in the sector.

(Peter Nurse, Oliver Gray contributed to this article.)

Latest comments

trading always winsss👍
This is Wall St. pricing in a Trump win.
A state of confusion! Stay put and watch…
The Fed has permanently destroyed the value of money.
I am amazed at how many newscasters keep putting out this garbage of how the feds are gonna give us rate cuts. They have been very clear that it is going to be a while before we get more rate cuts. I wish the newscasters would stop creating false hope
This time is different. Just ask Brad, Ac, and Mr. Last.
we're only following the numbers the technicals. when they change we'll change. that's why we make money and most of you don't.
Daniel most successful traders don't care what the newscasters think or say.
So Musk is ready to run from Tesla to do the AI thing. Tesla story and thesis is immediately invalid. Damn.
EV's are for DummiEs.
So Rate cut hopes were good for a 5K stock pump. But Rate cut 'dents' only move stocks down 200 points. Sure!
The 5k pump didn't happen in one day..
Do you think it happens in a day? Did the upswing you speak of 5000 happen in a day?
The financial world is at war with it self, Sales are down,cost are up across the board. Transportation is at crazy prices,people can not afford to by food,we all buying second grade food to survive, people are starving all over the world. They tells us to work on climate change because we have distroyed to world we have and no they are looking for another planets to fill with more crap . We are buying more rubbish from china which doesn’t recycle and not making quality goods the last and be recycled. We have more debit and rising fast, no money for a rainy day, yet they tell us it will be ok. The middle class has gone down the drain, and the world is at war with it self and every country is not behaving like a good citizen and the world has gone down the toilet. We need to fix it with action not words. This will affect All Companies World Wide and All countries.
that's what the Biden administration inherited....
Steve still pushing Trump's Proven big lie....
looks there still a lot of naive people that don't mind being conned by GrifterTrump his proven lies, and betrayal of America democracy.
Why the IBs only keep upgrading and increase the share price target instead of the earning forecast since they predict optimism increase demands in chips? Double the stock price but minimal increase in earning forecast.....
Our currency will soon be devalued again as the printing press rolls into overtime. It's naive to believe that rates can or should be lowered as we at the same time are debating in Washington how much to increase our 34 trillion debt .
Dent rate cut hopes or quash rate cut hopes?
article hard to take seriously with all the errors in it
Another "late trade" magic show in the laughingstock of the financial world.
another late complaint and a show of ignorance by Mitch.. Believe Mitch and lose money.
Hahaha, who are the fools that think inflation is under control?
They're the "fools" who are smarter than the retrumplicans who had claimed US is already in recession for months.
ha ha ha ,who us the fool who can't proof that inflation is not under control.
World war 3 upcoming
  Some retrumplicans/Qanon, such as Lin Wood, claimed Trump is still potus and in the White House, so you're kinda correct in that sense.
  Mike's American-made “cyber symposium” was a failure; he never paid the $5 million to Bob after Bob disproved Mike's data
William, unfortunately the guy that owns that company, has been pushing the Proven lies of the enemies of American democracy.
Have to laugh. Financial media state the FED is "winding down QT" as if its a normal cycle. QE never went anywhere.. look at all the regional bank bailouts and liquidity pumped into these superficial markets
Major banks are doing well!...what a surprise! Stocks should be soaring...right? Unfortunately the rest of the US is suffocating under record credit card debt, soaring inflation, record bankruptcies and an imploding economy with massive layoffs. I'm sure its nothing, stocks up by end of week!
So, economy is ok, the banks earn most, no need to cut anything
I sense sarcasm :-)
Economy can be ok and Fed still should cut rate.  Why settle for ok instead of optimal?
and look at that. we green again!
And back to red.
One miraculous intraday "recovery" after another in the BIGGEST INVESTMENT JOKE IN THE WORLD.
yeah, its totally bullshit bro
it seems many of you love bullshit.
if you believe Mitch ignorance ,then you shouldn't be trading the markets; you'll end up broken like Mitch.
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