Tech stocks led a broad equity retreat on Thursday as Wall Street fretted about the Federal Reserve’s hawkish message alongside its decision to keep interest rates on hold.
The S&P 500 (^GSPC) fell 1.1%, after losing about 1% on Wednesday, and the Dow Jones Industrial Average (^DJI) fell 0.6%. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 1.3% to continue to lead the decliners.
After examining the central bank’s forecast, investors believe that policymakers will keep interest rates on hold for the “longer term.” The debate is over how long that would be, with the central bank suggesting another hike at one of its last two meetings this year. Goldman Sachs pushed back its forecast for a Fed rate cut in the fourth quarter of 2024.
Read more: What the Fed rate hike pause means for bank accounts, CDs, loans and credit cards
The prospect of long-term rate hikes has angered some investors, putting pressure on stocks and bonds. The yield on the benchmark 10-year Treasury rose on Thursday, at one point touching its highest level in more than 15 years.
However, the chairman of the Fed, Jerome Powell, emphasized in the press conference that the policy will be based on economic data. Figures released on Thursday showed last week that jobless claims fell to their lowest level since January, the last sign of strength in the US labor market.
The Bank of England decided to keep interest rates on hold on Thursday, ending 14 consecutive hikes following an unexpected slowdown in inflation. In Europe’s central banks, there were some surprises: the Swiss National Bank kept rates on hold, while the Norwegian central bank signaled in December that it might follow a September hike.
In individual stocks, FedEx shares popped after a big quarterly profit.
Stocks trending in the afternoon
Here are some of the stocks on Yahoo Finance’s trending tickers page during afternoon trading on Thursday:
Eli Lilly (Lily): The drugmaker’s stock fell 4 percent after the company sued 10 medical spas, health centers and compounding pharmacies earlier this week for selling Munjaro, a diabetes drug expected to be approved for weight loss later this year. .
FedEx (FDX): Its stake in FedEx was down nearly 5%, a day after it posted a profit as it took customers away from competitors.
SPLK: Shares of Splunk jumped more than 20% in afternoon trading after agreeing to a $28 billion takeover of the AI and data-focused cloud computing company. Cisco ( CSCO ), down 4%.
KVYO: Shares in Clavio fell 0.8% a day after the trading automation firm made its stock market debut.
NVIDIA (NVDA): Shares of the chip giant fell 2% after the Fed hawkish pause as several rate-sensitive stocks took a hit.
Stocks fall in afternoon trading
Wall Street lost more ground Thursday afternoon as it grappled with signs of a Fed hawkish move to extend higher rates ahead.
The S&P 500 (^GSPC) lost 1.1%, while the Dow Jones Industrial Average (^DJI) fell 0.6%, or 200 points. The tech-heavy Nasdaq Composite ( ^IXIC ) fell roughly 1.3 percent.
Unemployment claims unexpectedly fall into another sign of resistance
The number of Americans filing for unemployment benefits fell by 20,000 last week, the lowest number since January, a sign of a strong labor market even as the Federal Reserve moves forward with its tightening campaign.
New jobless claims came in at 201,000, according to Labor Department data. Released On Thursday, beat the expected 225,000. It was another stronger-than-expected reading in the face of higher interest rates.
Central banks are watching closely for signs of labor market weakness as they try to bring down historic inflation. As the economy weakens, unemployment claims rise, which could signal a recession. Jobs statistics have proved strong in recent months, but fueled hopes that the Fed’s tightening will not trigger a wave of cuts or a broader recession. Conversely, Fed Chairman Jerome Powell said during a highly anticipated policy press conference on Wednesday that he wants stronger economic activity, which could prompt the Fed to “do more with prices.”
The Fed has warned of a stronger-than-expected US economy, and central bankers are now expecting the economy to grow 2.1% this year, up from June’s forecast of 1.0%.
Shares of Fox and News Corp rose after Chairman Rupert Murdoch stepped down.
Investors in Fox ( FOXA ) and News Corp. ( NWS , NWSA ) appeared to be pleased after the companies announced Thursday that Chairman Rupert Murdoch is stepping down from his role at the helm of the global media empire he built and shaped over seven decades. The modern era of news media. Murdoch’s eldest son, Lachlan, who served as co-chairman of News Corp., will continue as chairman of that company and chief executive officer of Fox.
Lachlan’s ascension ended claims to his father’s succession and cemented Lachlan’s role as the new leader of the kingdom. Fox shares rose more than 2 percent and News Corp. gained 0.8 percent in morning trading Thursday.
“Throughout my career, I’ve been immersed in news and ideas every day, and that doesn’t matter. But the time is right for me to take on different roles,” Murdoch wrote in a memo to staff. Murdoch, 92, will serve as chairman of both companies.
Stocks are trending up in morning trade.
Here are some of the stocks leading Yahoo Finance’s trending tickers page in morning trading on Thursday:
SPLK: Shares of Splunk rose more than 20 percent in morning trading after Cisco ( CSCO ) agreed to take over the AI and data-focused cloud computing company for $28 billion. The all-cash offer to buy Splunk at $157 per share was priced at a 30% premium. “For Cisco, this means that the tech stalwart has not been sitting idle in this market with Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler and others, and is now making a strong play to gain market share in the coming years,” Wedbush analyst Dan Ives said in a note on Thursday.
FOX (FOXA) and News Corp. (NWS, NWSA): Fox and News Corp. investors appeared heartbroken Thursday after the companies announced that Chairman Rupert Murdoch was stepping down as chairman, ending more than seven decades of leadership and creating a global media empire. Murdoch’s son Lachlan will be sole chairman of both boards. The transition has ended Murdoch’s succession claims and cements Lachlan’s role as the new leader of the state. Fox shares rose nearly 3 percent and News Corp. gained 0.8 percent.
Stocks opened lower after the Fed signaled an extended tightening cycle
Sour sentiment on Wall Street continued at Thursday’s opening bell as investors heeded the Fed’s hawkish message to keep rates on hold for longer.
The S&P 500 (^GSPC) lost 0.6%, while the Dow Jones Industrial Average (^DJI) fell 0.3%, or about 100 points. The tech-heavy Nasdaq Composite (^IXIC) lost 0.9%
Broadcom, Clavio, Nvidia: Stocks trending in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page in premarket trading on Thursday:
Broadcom (AVGO): Shares of Broadcom fell 6% in premarket trading after it was revealed that Google executives are discussing ending the company’s supply of artificial intelligence chips by 2027 European time.
KVYO: Shares in Clavio fell 3 percent a day after the marketing automation company made its stock market debut.
Nvidia (NVDA): The chip giant fell 2% after the Fed’s hawkish pause as several rate-sensitive stocks took a hit.
FedEx (FDX): Shares in FedEx rose 5%, a day after posting a profit, thanks to taking customers from rivals.
As the Fed forecast comes in, stocks fall further
Wall Street stocks looked poised to extend losses on Thursday as investors debated how long it might be before Fed policymakers cut interest rates from higher levels.
Futures tied to the Dow Jones Industrial Average (^DJI) were down 0.50%, or 175 points, while S&P 500 (^GSPC) futures fell 0.70%. Nasdaq 100 futures were down 0.92%
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