Wall Street Sees Minor Declines Amid Economic Data and Anticipation of Fed Chair’s Speech
On Thursday, Wall Street witnessed slight dips in its main indexes during fluctuating trading sessions following the release of the expected monthly producer price data. Investors are holding their breath for further insights on interest rate futures from Federal Reserve Chair Jerome Powell’s forthcoming remarks later in the day.
Producer Prices and Jobless Claims Data Released
The Producer Price Index (PPI), which measures the average change over time in the selling prices received by domestic producers for their output, increased by 0.2% for October, aligning with market predictions. However, the yearly increase stood at 2.4%, slightly surpassing expectations.
Simultaneously, the number of jobless claims showed a decrease, falling by 4,000 to reach 217,000 for the week ending on November 9, a figure lower than what analysts had anticipated.
“The data continues to reinforce the narrative that inflation and employment are steadily moving towards a gentle stabilization,” commented Keith Buchanan, a senior portfolio manager at Globalt Investments. Buchanan also noted concerns that rising Treasury yields could signal potential hurdles in achieving this economic softening.
Market Reactions and Interest Rate Speculations
There’s a noticeable shift in inflation expectations within the bond market, evidenced by the climb in the U.S. 10-year Treasury yield to its highest point since July. This adjustment has led traders to slightly cut back on their expectations for an interest rate decrease at the Federal Reserve’s December meeting. Post-data, the likelihood of a 25-basis point cut has adjusted to 79.1% from an earlier 82%, as per the CME FedWatch tool.
The Dow Jones Industrial Average dropped by 36.90 points, a decrement of 0.08%, closing at 43,921.29. The S&P 500 fell by 9.36 points, or 0.16%, to 5,976.02, while the Nasdaq Composite saw a reduction of 34.83 points, or 0.18%, ending the day at 19,195.90.
Despite the general downturn, the Dow’s losses were mitigated by a 10.4% surge in shares of Walt Disney following its earnings report, which exceeded expectations. Conversely, rate-sensitive growth stocks like Tesla and Alphabet faced declines exceeding 1%. The real estate sector recorded the largest drop within the benchmark index.
Fed Chair Powell to Update Economic Outlook
Later today, Jerome Powell is scheduled to update his economic perspectives in a discussion with business leaders in Dallas. This follows a shift in focus among some Federal Reserve policymakers who are reassessing inflation risks and deliberating the timing and extent of future rate cuts.
Fed Governor Adriana Kugler shared on Thursday that the central bank has made significant progress toward its employment and inflation objectives, although challenges persist in bringing inflation back to its target level.
While the post-election stock market rally shows signs of fading, attention is turning towards the potential inflationary impacts of policies proposed by President-elect Donald Trump. Stocks in cryptocurrency-related firms have climbed, buoyed by expectations of favorable regulations under the new administration, with MARA Holdings and MicroStrategy experiencing notable gains.
In other news, Tapestry’s stock jumped 8.8% to its highest point since early 2014 after announcing the cancellation of its $8.5 billion acquisition of Capri Holdings following a legal blockage, which resulted in a 4.2% drop in Capri’s shares.
Additional remarks from Fed official John Williams are anticipated later in the day, potentially providing more market-moving insights.
In today’s trading, advancing issues outnumbered decliners with a 1.29-to-1 ratio on the NYSE and a 1.12-to-1 ratio on the Nasdaq. The S&P 500 recorded 16 new 52-week highs and six new lows, while the Nasdaq noted 37 new highs and 61 new lows.
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Passionate about analyzing economic markets, Alice M. Carter joined THE NORTHERN FORUM with a mission: to make financial concepts accessible to everyone. With over 10 years of experience in economic journalism, she specializes in global economic trends and US financial policies. She firmly believes that a better understanding of the economy is the key to a more informed future.
