Wall Street closed mostly lower on Wednesday, with investors being cautious despite the latest rate policy guidance from the U.S. central bank exhibiting few surprises, extending the S&P 500’s losing run to four sessions.
According to the Federal Reserve’s Jan. 31–Feb. 1 meeting minutes, “nearly all” Fed officials concurred to limit interest rate rises to a quarter percentage point per month.
S&P ends down
The notion that the dangers of high inflation remained a “key element” that would influence monetary policy and that additional rate hikes would be required until it was under control, however, nevertheless had strong support.
Little surprises were contained in this messaging compared to what the Fed and its governors have been saying in previous weeks, and markets remained mostly stable following the release of the minutes, following tumultuous trading before their release.
- Nearly everyone agreed to the previous 0.25% raise, according to Fed minutes.
- Further increases would probably be necessary to control inflation.
- S&P declines for the fourth session in a row, the worst stretch since mid-Dec
- Indexes: Nasdaq rises 0.13%, Dow declines 0.26%, S&P falls 0.16%
The S&P and the Dow both had drops, but they were not as severe as the one on Tuesday, which was the worst day for market performance in 2023. The three major indices had monthly gains in January after the market crashed in 2022 as investors believed the Fed would hold off on further rate hikes and potentially change course by year-end.
Although traders priced in higher interest rates for a longer period of time, anticipating that inflation will remain higher in a robust economy, stocks have had a wild run in February. Participants in the money market anticipate that rates will reach their peak in July at 5.35% and then hover there through the end of 2023.
We’ll have to wait and watch what happens with the stock market, but according to Moya of OANDA, a bearish trend should prevail over the coming weeks.
The majority of the 11 significant S&P 500 sectors decreased, with the worst performance being energy (.SPNY) and real estate (. SPLRCR). In decline, the pair fell 0.8% and 1%, respectively.
CoStar Group Inc (CSGP.O), a provider of online real estate platforms, dropped 5.1% after announcing that it was no longer in talks to acquire Move Inc, the company that owns Realtor.com, from News Corp (NWSA.O), which closed 3.2% lower. 10.58 billion shares were traded on U.S. exchanges, which is lower than the 11.61 billion averages for the entire session for the previous 20 trading days.
