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

© 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.

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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