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Stock Market Today: Dow slumps as Fed's Powell deals blow to March rate cut

Published 01/30/2024, 06:46 PM
Updated 01/31/2024, 04:15 PM
© Reuters.

Investing.com -- The Dow slumped Wednsday, as the Federal Reserve's chairman Jerome Powell said it was unlikely that the Fed would cut rates in March, dealing a blow to hopes for sooner rate cut that added fuel to the tech-led selloff.

By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average fell 317 points, or 0.8%, while S&P 500 fell 1.6%, and Nasdaq Composite slipped 2.2%.

Fed signals no rush to cut rates, Powell knocks March cut hopes, but Treasury yields remain in red

In blow to sentiment for sooner rather than later rate cut, the Fed said it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

In a further sign that the Fed isn't likely to cut in March, Federal Reserve chairman Jerome Powell said that it wasn't likely that the committee will reach a level of confidence by the time of the March meeting to cut rates, though continued to stress that future policy decisions would depend on incoming data.

The updated view on monetary policy arrived on the heels of unchanged rate decision that was largely expected. Despite the less dovish than expected monetary policy statement, Treasury yields continued to languish in the red, with the Fed rate-sensitive 2-year Treasury yield falling 9.3 basis points to 4.262%.

The Fed statement followed the ADP National Employment report showing that 107.000 jobs were added to private payrolls in January, slightly less than expected, though the JOLTS report a day earlier pointed to an unexpected rise in December job openings.

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Big tech fails to live up to elevated expectations as Alphabet (NASDAQ:GOOGL), Microsoft, AMD slip

Alphabet (NASDAQ:GOOG) fell over 6% as underwhelming advertising revenue offset better-than-expected fourth-quarter results. The YouTube-parent also signaled that spending would be "notably larger" in 2024, as it attempts to build out its AI offerings at its key advertising and cloud services units.

Microsoft Corporation (NASDAQ:MSFT) fell more than 2% after its fiscal third-quarter guidance on revenue missed analyst estimates and overshadowed better-than-expected fiscal Q2 results amid signs stronger cloud growth.

Chip stocks were dragged lower by a 2% fall in Advanced Micro Devices Inc (NASDAQ:AMD) after chipmaker delivered Q1 guidance below estimates following Q4 results that were in-line with Wall Street estimates.

Tesla (NASDAQ:TSLA) stock wavered between gains and losses but ended 2% lower after a judge in the U.S. state of Delaware threw out CEO Elon Musk's huge $55.8 billion Tesla package, saying that awarding such an "unfathomable sum" was not fair to shareholders.

Should the ruling be upheld, Musk would lose options to more than 303 million Tesla shares, or roughly about 10% of the company and well below his previously stated goal of 25% ownership.

Elsewhere, Boeing (NYSE:BA) stock rose over 5% after the embattled aircraft manufacturer delayed the release of its 2024 financial forecasts, with CEO Dave Calhoun saying it still has "much to prove" to win back the confidence of both regulators and passengers in the wake of a dangerous mid-air door plug breach earlier this month.

(Peter Nurse Oliver Gray contributed to this article.)

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Latest comments

Facebook is going to pay a very high price for all the sexual exploitation content on his platform that has not been cleaned forcefully ! A senator has also asked why Facebook should continue to operate in the United States and pointed out the chief editor of Facebook is chinese, pointing out that Facebook spies on the US citizens for the account of another regime. Money first and then ethics, that's a story. That should impact the Nasdaq painfully.
No rate cut
All these young "investors" have only seen the market go up.
Mark your calendars!  No "record high" in the laughingstock of the investing world today.  But, alas, behold a miraculous 2-day "recovery" into the weekend to restore all of the criminally manufactured "gains".
i think this guy is short since covid and still hasnt recovered
You're absolutely right Mitch. I bought the dip. Won't make much money staying short. Today was an overdue consolidation.
Fed curs rates and printer gets turned off… they cant cut ever now
As Powell flexes muscles 🤭🤭
No worries folks, it’s an election year! These dirty politicians won’t let the markets collapse until after the election, keep your foot on the gas…
sad but true
Trumplafuks so dirty they have to obey
Repiglacons so dirty they have to Obey
welcome to the correction season
A major correction is overdue
Welp.  That leaves you most likely holding lots of Communist Biden Fiat Paper.  Take a look at Venezuela's fiat money.  That's his role model, it would seem.  Spend, spend spend, like a good little commie... until the currency has no value at all.
  US deficit fell under Biden.  As a % of GDP, US had highest deficit since WW II under Trump.
  And the last 2 times US had surplus was under Democrat potuses.
predicted correction maybe starting
VWAP for SPX from the 2024 low on Jan 5th is at about 4810.  Size of drop from all-time-high to 4800 would match sizes of 2 recent drops in late Dec 2023 and in mid Jan 2024.  At 4800, I'm thinking either drop further or pivot back up.
First, watch your fib retracement levels for posible pivots.when one fails there is a high probability that the market index will move to the next lower one.
Seems the Fed will only cut rates if disinflation becomes deflation, which would be cause for concern. The economy is doing just fine without any rate cuts.
ell la you have a good point. no down vote from me.
 Yes, a rate cut is expected in first half 2024.
They don't like rational thinking, that's why the down votes.
Without Covid and the War interest rates would be at 2 % right now.
But retrumplicans will keep blaming everything on Biden, whose Bidenomics has kept the US economy outperforming the world economy.
pos
Powellnomics destroyed the last day of the month. The fed is a scam people.
you must be long the market.
We won't go down untill elections.
hi
The flagrant break-even trampoline operating flawlessly in broad daylight.  Fraudulent, criminally manipulated JOKE.
more ignorant rants from Mitch.
Mitchell, don't you get tired of whining about the same thing over and over, every day?
dont worry the breakers will be activated soon and all will end green!
The Fed holding equities hostage. END THE FED and return to Free Market Capitalism.
Is hitting all time highs holding stocks hostages or does your dogma not comport with reality?
  His name is Malarkey  ;-)
more ignorance and malarkey from malarkey. he likes the.boom bust economy of the late 19th . century. free market capitaisml almost destroyed itself with the panic if 1906-1907. That's why the Fed was formed.
Month over month inflation rose in both November and December, 0.1% increase in November and 0.3% increase in December. What is market going to do when inflation comes in up again for the third time, and entire quarter of increasing inflation? Soon they will not be able to hide it as YoY number will start to reflect change. YoY is trailing indicator to MoM changes. P/E's are through the roof. There is no actual gross, the bubble has only been created through massive growth over government debt and fabrication of government jobs to pad the actual job numbers,
this decision will have bad impact on WTI oil.
yes, to so called control the inflation mainly just by manipulating oil price, Bidenomics
Not if they're Dovish.
Look at that miraculous "reversal" for the DOW, as savvy "investors" rush in to "buy" the second it goes negative.  Can't have a day in the BIGGEST INVESTMENT JOKE IN THE WORLD without a criminally manipulated "record high," now can we?
Really quite amazing. The DOW has climbed $5,000 or so since October. No real correction. I'll bet Algos are wondering if anyone will notice.
  The DOW had climbed 18-19% in a quarter year many times in the past.  Really not amazing.
Lets see what market miracles we will witness today 'ahead of the FED"...that's usually a good cover for liquidity fuel injections
"Largely Lower" ??? This overvalued nonsense it still at all time highs. Stop pretending that we actually have free markets and price discovery based on fundamentals and analysis. Some entity (under the guise of coordinated savvy 'investors') is still pumping a hell of a lot of liquidity into these markets
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