US Markets on 31 Jan: Fed Chair Powell’s Remarks Ignite Tech-Led Selloff

 

US Markets, 31 Jan 2024: US stock markets opened lower on Thursday, as tech stocks fell sharply after disappointing quarterly results from Alphabet (Google) and investors are cautious ahead of the Federal Reserve monetary policy meeting outcome later in the day.

The  Dow Jones Industrial Average (DJIA) opened lower by 40.53 points at 38426.78, while the S&P 500 index made a negative opening of 25.78 points and opened at 4899.19. The Nasdaq Composite index opened a gap-down of 185.71 points at 15324.19.

 

US Markets Live Updates Today

 

US markets at 11.25 a.m. EDT, Dow Jones turned positive soon after opening and is trading marginally higher by 43.37 points or 0.11 percent at the 38510.68 level, while the S&P 500 is trading lower by 38.62 points or 0.78 percent at 4886.35 levels. The tech-heavy Nasdaq Composite Index extended its early losses and is trading lower by 215.88 points or 1.39 percent at 15294.01 levels. 

 

US Markets News

 

The US stock market indexes are mostly trading lower on Wednesday. The Nasdaq index fell sharply as Google parent Alphabet tumbled more than 6% after it reported disappointing ad revenue. This has ultimately offset better-than-expected earnings and sales during the quarter, the results were released on Tuesday after the market close. Other stocks in the tech space- Meta platform, Microsoft, Apple, and Amazon are trading lower by more than 1% each.

Investors are cautious, as the Fed’s rate decisions are also at the top of their minds today. As widely expected, the Fed would leave rates unchanged today, but investors will be looking for the Fed’s Chair Jerome Powell’s commentary after the policy updates for the next move on rate cuts. According to the CME FedWatch tool, the Fed funds futures market has priced in a nearly 62% probability that there be a rate cut in the March meeting. 

On the economic front, the employment cost index rose less than expected in the December end quarter as compared to the previous quarter. Separately, a private payroll report from ADP data showed slow growth in January. The private payrolls added 107,000 employees in January, while the economist expected 150,000.

Meanwhile, the Treasury yields slipped ahead of the Federal Reserve meeting outcome. The 10-year Treasury yields slipped below 4% to 3.955%, it was settled at 4.034% on Tuesday.

 

US Stocks in News

 

The shares of Paramount Global jumped more than 9% after the news that billionaire entrepreneur Byron Allen has given a $14.3 billion takeover offer. The deal values Paramount at about $30 billion, including debt and equity.

Boeing shares rose more than 4% after the plane maker reported quarterly results amid the looming 737 Max 9 crisis. The company’s share declined more than 23% in January due to the crisis.

The share price of AMD fell more than 3% despite reporting better-than-expected financial results for its fourth quarter. The decline in shares is due to revenue forecast, which falls below the consensus estimates.

 

Crude Oil Prices

 

The crude oil prices are trading lower due to weak factory activity data from China, the largest importer of crude oil, weighed on demand sentiments.

The US WTI crude trades lower by 1.62% at $76.56 per barrel while London-based Brent crude oil is down by 1.35% at $81.35 per barrel.

 

Also, read –  Global Stock Market: Weekly Overview of Key Trends and Market Performances

 

US Markets at Close

 

US markets fell sharply on Wednesday, as Fed Chair Jerome Powell kept the key rates unchanged and hints that rate cuts are not coming soon. Powell’s remarks poured cold water on the hopes of an early rate cut and that added fuel to the tech-led selloff. 

The Dow Jones Industrial Average (DJIA) closed lower by 317.01 points or  0.82% and closed at 38150.30, while the S&P 500 index was down by 79.32 points or 1.61% and settled at 4845.65. The tech-heavy Nasdaq composite index declined 345.89 points or 2.23% and finished at 15164.01.

 

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