Last Updated 4:05 PM EST
Stock indices finished today’s trading session in the red. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) fell 1.63%, 1.65%, and 1.37%, respectively, after the Federal Reserve raised interest rates, with Jerome Powell stating, “If we need to raise rates higher, we will.”
This comes despite the issues witnessed in the banking sector recently, which is nursing massive losses on fixed-income assets thanks to rising rates. This has made them very vulnerable to withdrawals from depositors. Nevertheless, Powell also stated that “We have the tools to protect depositors when there’s a serious threat to the economy.”
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.44%. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 3.94%. This brings the spread between them to -50 basis points.
Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 4.5% to 4.75% increased to 19% compared to yesterday’s expectations of 10.9%.
In addition, the market is now also assigning a 28.6% probability to a range of 5% to 5.25%. For reference, investors had assigned a 47.3% chance yesterday.
Last updated: 3:18PM EST
Stocks cut their earlier gains as some indices turn negative following the Federal Reserve’s rate hike. As of 3:18 p.m. EST, the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) are down 0.4% and 0.1%, respectively. Meanwhile, the Nasdaq 100 (NDX) is up 0.4%.
Last updated: 2:05PM EST
Stock indices are rallying after the Federal Reserve’s interest rate decision. The market got exactly what it expected, as the target rate increased to a range of 4.75% to 5%.
As of 2:05 p.m. EST, the Dow Jones Industrial Average (DJIA), the Nasdaq 100 (NDX), and the S&P 500 (SPX) are up 0.1%, 0.9%, and 0.4%, respectively.
Last updated: 11:22AM EST
Stock indices are mixed so far in today’s trading session as investors await the Federal Reserve’s interest rate decision. Currently, the market is pricing an 89.3% chance of a rate hike, which would raise the target rate to a range of 4.75% to 5%.
As of 11:22 a.m. EST, the Dow Jones Industrial Average (DJIA) is down 0.1%, while the Nasdaq 100 (NDX) is up 0.3%. On the other hand, the S&P 500 (SPX) is flat.
Last updated: 9:45AM EST
The mortgage applications data published by the Mortgage Bankers Association (MBA) indicated that demand for mortgages picked up by 3% in the latest week as mortgage rates fell for the second week in a row. Demand for mortgages and refinancing both registered an uptick which resulted in the pushing up of the market composite index — a measure of mortgage application volume by 3% to 221 for the week ending March 17 from the previous week.
Meanwhile, traders braced for a hike in interest rates ahead of the Fed’s rate decision today. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) all dipped by 0.16%, 0.13%, and 0.11%, respectively, at 9:45 a.m. EST, March 22.
First published: 6:26AM EST
U.S. futures are trending in negative territory on Wednesday morning, as markets await the Federal Reserve’s vital interest rate decision. Today’s rate announcement will be the biggest market mover for the next couple of days. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.24%, 0.14%, and 0.11%, respectively, at 5:20 a.m. EST, March 22.
The Fed will announce its interest rate stance after its 2-day Federal Open Market Committee (FOMC) meeting ends today. A majority of traders expect a 25 basis point increase in rates. If a higher number comes in, it will drag the market into a downward spiral. Comments from Fed Chair Jerome Powell will also be watched closely to gauge the Fed’s hawkish/dovish monetary policy going forward.
Meanwhile, the heat in the banking stocks seems to be cooling off. Authorities worldwide are trying to restore investor and depositor confidence, with larger, well-capitalized banks being pushed to support the smaller ones. U.S. Treasury Secretary Janet Yellen’s announcement that the government will provide more backup for regional banks, pushed the stocks higher in trading yesterday. Most importantly, the global economies are trying to stabilize the situation to avert a 2008-like financial crisis amid fears of a looming recession.
U.K. Inflation Comes in Hotter-Than-Expected
European indices traded mixed today, following the higher-than-expected inflation figures from the U.K. The consumer price index (CPI) number rose to 10.4% in February, up from a 10.1% rise in January, while economists were expecting a decline to 9.9%. Similarly, core inflation (excluding food and gas) grew to 6.2% in February from a 5.8% reading in January. The Bank of England will hold its monetary policy decision tomorrow, March 23, which will be driven by the hot inflation numbers and market instability.
Asia-Pacific Markets Finish in the Green
Asia-Pacific markets ended the trading session in the green today, as global markets await the U.S.’ key interest rate decision. Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the day up 1.73%, 0.31%, and 0.70%, respectively.
Further, Japan’s Nikkei and Topix indices finished the trading session in the green, up 1.93% and 1.74%, respectively.
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