(CercleFinance.com) – Wall Street is back on a downward path on Tuesday, with investors adopting a cautious attitude on the eve of the Fed’s decisions and after a worrying indicator on American consumer sentiment.
At the end of the morning, the Dow Jones fell 1% to 34,033 points, while the Nasdaq Composite dropped 2.1% to 13,563.9 points.
After two days of debate, the Federal Reserve Monetary Policy Committee (FOMC) is expected to leave interest rates unchanged tomorrow.
However, central bank chairman Jerome Powell’s press conference could provide investors with some interesting clues regarding the expected path of rate hikes.
Economists expect at least four rate hikes by the end of the year, but financial markets do not seem to have fully priced in this scenario so far.
While awaiting the Fed’s verdict, investors studied the various economic indicators published before the opening, starting with the American consumer confidence index compiled by the Conference Board.
This deteriorated in January, to 113.8 for the current month, compared to 115.2 for the month of December.
Still on the figures side, the Case/Shiller index shows an 18.5% increase in real estate prices on an annual basis in December.
Another element influencing the trend, investors have to deal with numerous results publications, including that of GE, which resulted in a drop of more than 6% in the title of the industrial group.
The publications of American Express (+8%) and Johnson & Johnson (+1.5%) are better received, while Microsoft won 2.5% pending the announcement of its quarterly performance, scheduled for the evening.
Nike (-0.8%) manages to outperform the trend, albeit with difficulty, following an increase in the recommendation of Wells Fargo analysts, who now advise to ‘overweight’ the title.
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