US Markets on 5 Feb: Powell’s Comments Drive Losses in Dow, S&P 500 & Nasdaq

 

US Markets, 5 Feb 2024: The US stock markets opened lower on Monday, as Treasury yield spiked following recent comments from Fed Chair Jerome Powell dampening hopes of March rate cuts. 

The Dow Jones Industrial Average (DJIA) opened lower by 107.65 points at 38546.77, while the S&P 500 index made a negative opening of 1.42 points and opened at 4957.19. The Nasdaq Composite index opened lower by 14.96 points at 15613.99.

 

US Markets Live Updates Today

 

US Markets Live at 11.30 a.m. EDT- The US stock markets extended their early losses. Dow Jones Industrial Average (DJIA) is trading lower by 361.78 points or 0.94 percent at the 38292.64 level, while the S&P 500 is trading negative by 28.22 points or 0.57 percent at the 4930.39 level. The tech-heavy Nasdaq Composite also extended its early losses and is trading lower by 99.45 points or 0.64 percent at 15529.51 levels. 

 

US Markets News

 

The US stock markets are trading lower as traders’ moods become downbeat after Fed Chair Jerome Powell said that the central bank wants more evidence that inflation is cooling and is moving sustainably down to the set target of 2%. Powell said this on Sunday in an interview with “60 Minutes”. He further said that the strong US economy can give some more time to take the important step to start reducing the interest rates.

Powell has repeated his remarks from last week’s monetary policy meeting. In its most recent monetary policy, the Federal Reserve opted to keep interest rates unchanged. Powell, in his post-policy commentary, mentioned that a rate cut in March is unlikely.

Friday’s strong job report further reduced the chances of early rate cuts and spiked the Treasury yields. The 10-year Treasury yield extended Friday’s gain and climbed to 4.163%, up from 4.023%. The CME FedWatch tool now shows that there is only a 16% chance that the Fed will reduce the 25 bps rate in March.

On the economic front, the US service activity expanded higher than expected in January, growing higher for the 13th straight month.

 

US Stocks In News

 

Quarterly earnings are in full swing and investors are in focus new batch of corporate earnings this week. Caterpillar, the machinery manufacturer reported its quarterly earnings on Monday, its profit beat expectations. The share price of Caterpillar trimmed some early gains and is trading higher by 0.61%.

MacDonald also reported its quarterly earnings on Monday, the burger chain has missed market estimates due to the ongoing crisis in the Middle East. The share price of MacDonald is trading lower by more than 3% 

The share price of Boeing declined to around 1.5% on the news that it will have to rework 50 undelivered 737 Max airplanes.

The social media company Snap declined more than 4% after the company announced to layoff on Monday which will reduce 10% of its global workforce or about 500 staff.

 

Crude Oil Prices

 

On Monday, crude oil prices are trading flat due to a robust U.S. job report, mitigating the sharp declines seen last week that reduces the chances of early rate cuts. However, persistent air strikes in the Middle East by the US kept the geopolitical tensions high.

The US WTI crude trades slightly lower by 0.22% at $72.12 per barrel while London-based Brent crude oil is flat at $77.33 per barrel.

 

Also, read –  Global Stock Market Weekly Update: Mixed Signals from the US, Europe, and Asia

 

US Markets at Close

 

US markets closed lower on Monday, the Dow Jones declined the most, due to a fall in consumer stocks led by McDonald’s and a surge in Treasury yields after Chairman Jerome Powell’s comments that diminished the hope of early interest rate cuts.

The Dow Jones Industrial Average (DJIA) closed lower by 274.30 points or 0.71% and closed at 38380.12, while the S&P 500 index declined 15.80 points or 0.32% and settled at 4942.81. The tech-heavy Nasdaq composite index was down by 31.28 points or 0.20% and finished at 15597.68.

 

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