Stock futures are steady after a volatile session following the Fed’s latest rate hike
Stock futures were slightly higher on Wednesday evening after losses in intraday trading after the Federal Reserve delivered another interest rate hike and signaled no pivot or rate cut anytime soon.
Futures tied to the Dow Jones Industrial Average rose 41 points, or 0.13%. S&P 500 and Nasdaq 100 futures were higher by 0.16% and 0.21%, respectively. Shares of Qualcomm, Year and Fortinet it fell after reporting disappointing quarterly results and guidance for the future.
Traders had expected a 0.75 percentage point increase in the central bank’s rate and initially read the Fed’s statement as dovish, sending stocks higher.
Those gains were reversed when Federal Reserve Chairman Jerome Powell said it was “premature” to talk about a pause in interest rate hikes and that the terminal rate was likely to be higher than previously indicated.
Traders react as Federal Reserve Chairman Jerome Powell speaks on a screen on the floor of the New York Stock Exchange (NYSE) in New York, November 2, 2022.
Brendan McDermid | Reuters
“We still have some way to go and the data coming in since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.
The Dow Jones Industrial Average ended Wednesday’s trading session 416 points lower, or 1.3%, paring its significant October rally. The S&P 500 fell 2% and the Nasdaq Composite fell 2.8%.
Markets will likely continue to wobble until it is clear that inflation has cooled and the Fed has stopped marching rates higher. Any data showing that the US economy is not slowing down as the central bank tightens policy is likely to weigh on stocks.
The next major report is October’s non-farm payrolls, due on Friday.
“You get a good number of jobs, in other words a good unemployment rate that’s not going up, then the market is in big trouble,” Guy Adami, director of advisor advocacy at Private Advisor Group, told CNBC’s ” Fast Money.”
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