What is the Fed doing?
Uncertain interest rate policy worries Wall Street
10/06/2022 11:26 p.m
How will the US Federal Reserve act in the near future? This question is having a massive impact on Wall Street and is causing restraint on the stock markets. Oil companies like Chevron or the Google subsidiary Alphabet can look forward to it. Elon Musk, on the other hand, should have little reason to be happy.
Uncertainty about the future pace of rate hikes by the Federal Reserve has held back investors on Wall Street. Of the Dow Jones lost 1.2 percent to 29,927 points. The tech-heavy one Nasdaq fell 0.7 percent to 11,073 points. Of the S&P 500 lost about one percent to 3744 points.
Stockbrokers rated the initial applications for US unemployment benefits positively, which were slightly higher than expected. However, the ADP labor market report did not provide any indication of a possible easing of monetary policy, and the further strategy of the fed remains largely open pending the release of official US jobs data on Friday. “Today’s trading day provides a foretaste of what could happen to investors in even greater form tomorrow after the publication of the US labor market data,” said analyst Konstantin Oldenburger from the online broker CMC Markets. “A change of heart by the US Federal Reserve appears to be wishful thinking on the part of investors at the moment.”
US dollar gains more than 1 percent
Speculations that the Fed would continue tightening its rate hikes helped the dollar to gain 1.2 percent. The price of oil also fluctuated. A barrel of US oil grade WTI grade rose 1.3 percent to $88.88 a barrel (159 liters). In their slipstream lay stocks of oil companies such as chevrons 1.8 percent to. The oil cartel Opec+ agreed on Wednesday to cut oil production by two million barrels a day, which drove prices up. “Of course, falling demand could partially offset these supply cuts, but that will depend on the severity of any recession,” said Warren Patterson, chief commodities analyst at ING Bank.
Tailwind for Alphabet
Among the stock values belonged Tesla with a minus of 1.1 percent to the losers. Financial investors Apollo and Sixth Street said they were no longer in talks with Elon Musk about funding his $44 billion Twitter deal. The presentation of a new smartphone and a smartwatch gave the Google mother alphabet tailwind. The titles ended up virtually unchanged. According to the newspaper Nikkei, Google has ordered parts for more than eight million copies of the new “Pixel 7” smartphone from suppliers.