High interest rates remain
Fed announcement hits Wall Street
September 21, 2023, 11:09 p.m
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The Fed is taking a breather from raising interest rates, but the prospect of further hikes this year isn’t exactly making investors happy. Interest rate-sensitive tech stocks are coming under pressure. In return, yields on the bond markets are increasing significantly.
Even the day after the US Federal Reserve’s decision, interest rate concerns are clouding the mood on Wall Street. The Dow Jones Index the standard values closed 1.1 percent lower at 34,070 points. The broad one S&P 500 lost 1.6 percent to 4,330 jobs and the technology-heavy sector Nasdaq 1.8 percent to 13,223 points. All three indices closed just above their daily lows.
The Fed decided on Wednesday to pause interest rate hikes. However, the monetary authorities signaled that they are considering another step up this year to combat the price rise. “It’s a continuation of the Fed’s strategy of always showing a decisive stance,” said Thomas Hayes of private equity firm Great Hill Capital. “So while we have a pause now, it has been followed, as expected, with a warning that the Fed is prepared to act if inflation does not fall further.”
Yields on the rise
The prospect of persistently high interest rates for the time being was driving this Bond market returns strong in height. At around 4.49 percent, the ten-year US Treasuries yielded the highest yield in almost 16 years.
The Dollar index increased 0.3 percent to 105,395 points. The Euro was barely changed at $1.0656. The British Pound lost 0.4 percent to $1.2290 after the Bank of England’s interest rate decision. The effects of the firmer US currency were mainly felt Industrial metals because an appreciation usually makes the raw materials quoted there more expensive for buyers who use other currencies.
Economic concerns also pushed prices down. Oil became somewhat cheaper. The North Sea variety Brent At $93.28 per barrel, light US oil cost 0.3 percent less than the previous day WTI at $89.60, 0.1 percent less.
FedEx asked
When it comes to individual stocks, the prospect of a possible further interest rate increase placed particular emphasis on the shares of companies such as Tesla, Amazon, alphabet and Nvidia to which lost up to around four percent. Higher interest rates are likely to reduce future profits for these high-growth companies.
The investors of Broadcom At the same time, there was concern about an impending loss of business for chip supplies to Google. The shares lost 2.7 percent. Google executives have discussed dropping Broadcom as an artificial intelligence (AI) chip provider as early as 2027.
After a jump in profits in the quarter FedEx on the other hand, up by 4.5 percent. The delivery group’s adjusted earnings per share rose more significantly than expected in the quarter. FedEx also raised its earnings estimate range. Were also in demand Fox Corp and News Corp, which increased by 3.1 and 1.2 percent respectively. Media mogul Rupert Murdoch resigns as chairman of both companies.