Dow Jones gives way slightly
Fed Chair Powell spits in the ointment of US investors
6/21/2023 10:53 p.m
Fed Chairman Powell has once again announced an inflation rate of around 2 percent as a target for the US Federal Reserve. This means that further interest rate increases are expressly not excluded. Wall Street investors are frustrated. The bottom line is that the Dow Jones posted a slight minus.
Signals from US Federal Reserve Chairman Jerome Powell for further rate hikes have spoiled the mood of investors on Wall Street. Investors cashed in on interest-dependent technology stocks in particular. The Dow Jones Index the standard values closed 0.3 percent lower at 33,951 points. The tech-heavy one Nasdaq fell 1.2 percent to 13,502 points. The broad one S&P 500 lost 0.5 percent to 4365 points.
The head of the Fed said at a hearing in the US Congress that there was still “a long way to go” before the target of an inflation rate of 2.0 percent would be reached. According to Powell, almost all members of the body responsible for interest rate policy expected that further hikes should be appropriate by the end of the year.
“The market would really appreciate it if the Fed indicated that the rate-hike cycle is closer to the end than Powell suggested today,” said strategist Dennis Dick, of broker Triple D Trading. But investors are not really smarter after the hearing, said market analyst Konstantin Oldenburger from CMC Markets. The discrepancy between monetary policy and interest rate expectations on the financial markets will remain.
On the futures markets, stockbrokers still expected a step up of 25 basis points for the Fed meeting in July, while pricing in no further tightening in the following months. Accordingly, the US dollar lost its interim exchange rate gains. The dollar indexwhich measures the US currency against other major currencies, was last down 0.5 percent at 102.07 points.
FedEx drags industry stocks lower
a rising one Bitcoinprice, meanwhile, helped the crypto sector higher. The cyber currency rose 6.8 percent to $30,077, its highest level in eight weeks. The world’s largest asset manager BlackRock had submitted an application for approval of a listed Bitcoin fund (ETF) in the United States last week. Papers of bitcoin miners Riot Platforms and Marathon Digital each gained around four percent.
In the wake of rising oil prices, investors grabbed US energy stocks. Oil company papers chevrons and Exxon Mobile climbed by up to 1.1 percent. title of Hess, SLB, Halliburton and APA gained up to 2.1 percent. The type of oil Brent from the North Sea increased in price by 1.6 percent to $77.15 per barrel.
In the case of companies, the letter and parcel deliverers moved into the limelight after FedEx presented disappointing figures. Although the US group has increased its margins, sales have shrunk more than feared, commented analyst Matthew Young from the research house Morningstar. FedEx shares lost 2.5 percent. The titles of European competitors such as German postal service, Bpost or post fell by up to 2.6 percent.
In the health care sector, shares in the drugmaker fell PTC Therapeutics by 2.7 percent. Preliminary study data showed that the experimental drug for treating the genetic disease Huntington lowers the amount of mutated proteins that cause the neurological disease.