- Wall Street remains mixed overall despite the weakening US dollar.
- US Treasury yields plunged after the Fed raised rates 25 basis points.
- Investors’ attention shifted to the Federal Reserve’s monetary policy decision.
In Thursday’s session, Wall Street is mixed as traders prepare for a possible pause in the Federal Reserve’s (Fed) tightening cycle. Money market futures expect three rate cuts by the Fed by the end of 2023, after raising 25 basis points on Wednesday. The S&P 500 lost 0.18%, to 3,932.41 points, while the Dow Jones did the same, with a decrease of 0.20%, to 31,966.32 points. The Nasdaq Composite is the outlier, led by large-cap companies, up 0.36% to 11,711.29 points.
Sentiment improved after US Treasury Secretary Janet Yellen rocked financial markets by saying the United States (US) government is not planning to introduce blanket insurance for all depositors on Wednesday. At the same time, US Federal Reserve Chairman Jerome Powell stressed that the banking system is sound after the Fed took steps to provide liquidity to the markets.
In addition, markets downplayed a 25 basis point rate hike by the Fed, despite Jerome Powell saying inflation is too high and the labor market remains tight. As for the latter, initial US jobless claims last week rose less than estimated, reaching 191,000, below forecasts of 201,000. Therefore, more tightening is expected from the Fed. Therefore, more tightening is expected from the US central bank.
The Chicago Fed’s national activity index for February fell to -0.19 from 0.23 the previous month.
US Treasury yields continue to fall, weighed down by investors expecting a further Fed rate hike and then a pause. The 2-year bond yield fell to 3.833%, down nine basis points, while the 10-year bond yield fell one basis point to 3,428%.
By sectors, communication services, technology and the real estate sector led the increases, with 1.66%, 1.38% and 0.01% each. On the contrary, Energy, Utilities and Finance ended with losses of 1.47%, 0.87% and 0.51% respectively.
In the currency market, the Dollar Index (DXY), which measures the value of the dollar against a basket of six currencies, lost 0.01%, standing at 102,528, after marking a weekly minimum of 101,910.
SP500 daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
