US stocks were mixed Wednesday afternoon after The Federal Reserve announced its latest interest rate hikea move that raised the Fed’s benchmark interest rate to the highest level since October 2007.
In its statement, the Fed noted inflationary pressures but said that inflation “remains elevated” as price pressures have been shown to persist throughout the economy.
The central bank also suggested that a rate hike on Wednesday would not mark the end of its campaign, saying the Fed “expects that sustained increases in the target range will be appropriate in order to achieve a monetary policy stance that is restrictive enough to bring inflation back to 2% over time.”
The statement added that futures contract increases “will take into account the cumulative tightening of monetary policy, the slowdown with which monetary policy affects economic activity and inflation, and economic and financial developments.”
After the Fed announced a 0.25% interest rate hike, its smallest increase in nearly a year, the Standard & Poor’s 500 (^ The Salafist Group for Preaching and Combat(down by 0.2%, while the Dow Jones Industrial Average (^ DJI) sank by 0.7%. Nasdaq Technology Heavy Composite (^ ix) to green figures, up 0.2%.
On Tuesday, stocks capped off a strong start to the year, with the S&P 500 posting its best January since 2019 while the Nasdaq 100 enjoyed its strongest January rally since 2001, up more than 10%.
Earnings season also still in effect, with Another disappointing quarter from Snap (pop) from last night garnered the most attention of investors.
Shares of the social media company fell more than 14% after the company he told investors Its internal projections assume that revenue in the current quarter will decline between 10% and 2% from last year.
match set (MTCH) and electronic arts (EAShares also fell more than 9% and 12%, respectively, on Wednesday After disappointing quarterly reports Tuesday afternoon.
peloton (PTONShares rose more than 17% on Wednesday after the company reported that its cash burn fell to $94 million in the most recent quarter, down from $747 million nine months ago. On an adjusted basis, the company reported $8 million in free cash flow during the holiday quarter.
“If you’re wondering whether or not the peloton can make an epic comeback, this quarter’s results show that the changes we’re making are working,” said CEO Barry McCarthy. He wrote in a letter to shareholders.
The earnings highlight will come on Wednesday after market close when (Meta Platforms)meta) issues its quarterly report.
On the economic data side, New data on the growth of private salaries The ADP showed private employers added 106,000 jobs last month, less than the 170,000 expected by economists.
In its report, the ADP said the weather affected its measure of the labor market, citing flooding in California and blizzards in the central and eastern parts of the country during the reference week.
“In January, we saw the impact of weather-related disruptions on employment during our reference week. Employment was stronger during the other weeks of the month, in line with the strength we saw late last year,” said Nella Richardson, chief economist at ADP.
data about December job openings He noted on Wednesday that demand for workers remains strong, with 11 million jobs available at the end of the month, up from 10.4 million at the end of November.
Elsewhere in the economic data, readings on the manufacturing sector from S&P Global and the Institute for Supply Management showed that activity remained subdued in the first month of 2023.
Latest ISM Manufacturing PMI The reading fell to its lowest level since May 2020which economists consider another sign of continued recessionary pressures in the US economy.
Andrew Hunter, chief US economist at Capital Economics, wrote in a note to clients on Wednesday that a more detailed look at the ISM report indicates that “domestic economic weakness is increasingly a major driver of manufacturing sector woes, and overall, the ISM report reinforces our view that The US economy is close to recession.
Standard & Poor’s Global Reading showed Manufacturing activity deteriorated at a slightly slower rate in January than December, but still indicated an “alarmingly sharp rate of decline in the health of the goods-producing sector,” according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
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