The Dow Jones Industrial Average closed lower on Monday (Jan 10) with the market pressured by concerns that The surge in inflation will prompt the Federal Reserve (Fed) to accelerate interest rate hikes. However, the Nasdaq closed in positive territory as investors bought up tech stocks later in the market.
The Dow Jones Industrial Average closed at 36,068.87, down 162.79, or -0.45%, the S&P500 closed at 4,670.29, down 6.74, or -0.14%, and the Nasdaq closed at 14,942.83, up 6.93, or +0.05%.
The Dow Jones Industrial Average closed down. amid concerns that Soaring inflation in the United States will pressure the Fed to accelerate interest rates, with the CME Group’s FedWatch tool indicating that investors are weighing more than 90 percent that the Fed will raise interest rates by 0.25% at its March meeting. c. This was the month when the Fed ended its quantitative easing (QE) bond-buying program.
Goldman Sachs chief economist Jan Hatseus forecasts the Fed will raise interest rates four times this year and begin cutting its balance sheet in July or sooner. Considering the US labor market is very tight. Coupled with the Fed’s signal to raise interest rates in the minutes of the December meeting. These factors all indicate that the Fed may accelerate its normalization of monetary policy faster than expected.
Industrial stocks fell 1.2 percent, the biggest drop among stocks calculated in the S&P500, with Boeing down 2.88%. Global, down 1.14 percent, General Electric (GE) was down 1.95 percent, 3M shares were down 1.41 percent.
The material group index was down 0.99 percent, with Vulcan Materials down 3.68 percent, Freeport-McMoran down 0.62 percent and Nucore Corporation down. 2.25% US Steel Corp shares fell 2.8 percent.
Nike shares were down 4.14 percent after HSBC analysts downgraded Nike’s investment attractiveness to “Hold” from “Buy”, citing Nike’s sales in China as “very strong”. The trend has slowed down further. After falling 24% during the period of September-November. 2021 to reach $1.844 billion
However, Rick Meckler, analyst at Cherry Lane Investments, said some investors have been buying late-stage tech stocks. Which is a factor supporting the Nasdaq index recovered to close in positive territory. Intel was up 3.31 percent, Tesla was up 3.03 percent, Alphabet was up 1.21% and NVIDIA was up 0.56%.
Healthcare stocks also rebounded on late-market buying momentum. Pfizer was up 0.93 percent, Merck & Co was up 2.58 percent, Eli Lilly was up 0.24 percent and Moderna was up 9.28%.
Investors are keeping an eye on US inflation numbers on Wednesday. This will determine the direction of the Fed’s interest rates. Also keep an eye on Fed Chairman Jerome Powell’s statement to the Senate Banking Committee today. This could indicate a trend in the Fed’s monetary policy.
Investors are also waiting to see the earnings release of listed companies this week. Big banks such as JPMorgan Chase, Citigroup and Wells Fargo will release their results on Friday.
.
