Stocks experienced a mixed closing on Wednesday following the Federal Reserve’s decision to lower the funds rate by 25 basis points. Chairman Jay Powell indicated that no decisions regarding a potential December rate cut were made, emphasizing that future cuts will depend on forthcoming economic data. This lack of clarity, combined with disappointing performance from some major tech companies, weighed on market sentiments.
In the aftermath of the announcement, interest rates saw an uptick, with the yield on the 10-year Treasury note rising back above 4% to finish at 4.08%.
As pre-market trading began on Thursday, futures pointed lower, signaling potential caution in the markets ahead of significant earnings reports from key technology firms, including Amazon and Apple. While major indices had hit new all-time highs earlier in the day, they succumbed to selling pressure after Powell suggested that another rate cut was not guaranteed. The Dow Jones Industrial Average, S&P 500, and Russell 2000 concluded the day in the red, while the NASDAQ remained buoyed by optimistic expectations surrounding the forthcoming announcements from tech giants.
In the Treasury market, yields spiked after Chairman Powell’s remarks, countering earlier declines in anticipation of the meeting. The uptick in yields may slow down the record pace of mortgage refinancing, as higher yields correlate with rising mortgage rates.
Crude oil prices showed some resilience, with West Texas Intermediate increasing to $60.38 per barrel and Brent Crude rising to $64.86. Analysts remain vigilant about the implications of U.S. sanctions on global oil markets. Natural gas prices remained stable, closing flat at $3.34.
Gold, after an initial rise, reversed course and closed slightly lower at $3,943. The precious metal has been under pressure due to recent significant price declines, though analysts remain bullish on its long-term trajectory despite current profit-taking among investors.
Cryptocurrency markets saw declines as both Bitcoin and Ethereum fell by nearly 3%, with Bitcoin settling at $110,679 and Ethereum at $3,917.
In the latest round of analyst ratings, several companies saw upgrades and downgrades. Notable upgrades included Coinbase Global, which was raised to a Buy rating with a target price of $425, and Etsy, upgraded to Buy with a target of $88. Conversely, Boeing was downgraded to Hold with a target of $240, while Meta Platforms saw a downgrade to Market Perform with an $825 price target.
In summary, the markets are navigating a period of uncertainty marked by interest rate fluctuations and varying stock performances, particularly in the tech sector, as investors brace themselves for key earnings reports and further economic data.
