Wall Street: Wall Street in disarray after services PMI and Powell’s comments

by Chibuike Oguh

NEW YORK (Reuters) – The New York Stock Exchange ended mixed on Wednesday after data indicating that activity in the U.S. services sector decelerated and comments from the chairman of the Federal Reserve (Fed) that the central bank would not rush to lower interest rates.

The Dow Jones index fell 0.11%, or 43.10 points, to 39,127.14 points.

The broader S&P-500 gained 5.68 points, or 0.11%, to 5,211.49 points.

The Nasdaq Composite advanced 37.01 points (0.23%) to 16,277.46 points.

In a speech to a US university, Fed Chairman Jerome Powell said the institution would continue to take a cautious approach to easing monetary policy, given the solidity of the American economy and recent higher-than-expected inflation data.

A private report released earlier today showed that services sector activity slowed in March for a second consecutive month, with the PMI below consensus but still above the threshold of 50 separating contraction and expansion of the activity. The service sector represents more than two-thirds of the American economy.

“What has weighed on the market today, and for the last two to three days at least, is the Fed and the market’s expectations about rates being pushed back,” commented Tim Ghriskey, strategist at Ingalls & Snyder , At New York.

While they hoped at the start of the year that the Fed would make a shift in its monetary policy from May, then from June, many market players now doubt the American central bank’s timetable, in light of solid economic data.

Atlanta Fed President Raphael Bostic told CNBC on Wednesday that rates are not expected to be cut until the fourth quarter.

“There’s a bit of a yin and yang scenario, with strong data coming with both good and bad sentiment – what is good news for the economy is potentially bad news for monetary policy,” commented James St. Aubin, chief investment officer at Sierra Investment Management in California.

Most major sectors of the S&P-500 ended the session in the green, led by energy and communication services.

Among the value movements of note, the 15.3% fall of Ulta Beauty after the announcement of gloomy forecasts at an industry conference. Coty and elf Beauty also declined.

Intel lost 8.2% after reporting a $7 billion operating loss from its foundry division last year, higher than the $5.2 billion reported for 2022.

(Written by Jean Terzian)

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