The Dow Jones Industrial Average closed up more than 500 points on Wednesday (Nov. 2) after Federal Reserve Chairman Jerome Powell indicated that the Fed would move more aggressively. Because inflation is still at a very high level.
The Dow Jones Industrial Average closed at 32,147.76, down 505.44, or -1.55%, the S&P500 closed at 3,759.69, down 96.41, or -2.50%, and the Nasdaq closed at 10,524.80, down 3,630.03%.
in the beginning The New York stock market jumps After the Fed board voted to raise the short-term interest rate 0.75% to 3.75-4.00%, in line with market expectations. and indicated that he would slow down interest rate rises at the December meeting
But the market later fell. After Mr. Powell announced after the meeting that Mr. “The Fed’s mission to fight inflation is not finished. Because inflation is still at a very high level. And the data that the Fed has received since the last meeting also indicates that the Fed may have to raise interest rates to a higher level than expected. I think it’s too early to talk about ending the rate hike cycle.”
In addition, Mr Powell said “The US economy still has a chance to avoid recession at a time when the Fed is raising rates to curb inflation. But the probability that the US economy will gradually slow down. or less of a soft landing because inflationary pressures are slowing.”
The Fed’s latest rate hike announcement comes after the US released strong labor data. That includes job openings (JOLTS), which jumped 437,000 to 10.7 million in September. Contrary to analysts’ expectations for a decrease of 9.85 million, JOLTS is one of the data that the Fed uses to determine monetary policy and interest rates.
In the latest workforce data on Wednesday, Automatic Data Processing, Inc. said. (ADP) that jobs in the private sector increased by 239,000 in October. That was above analysts’ estimates of 195,000 from 192,000 in September.
Interest rate sensitive stocks fell sharply. This includes technology and luxury goods. Amazon was down 4.82 percent, Netflix was down 4.80 percent, Meta Platforms was down 4.89 percent, Tesla was down 5.64 percent, Salesforce was down 6.14 percent, and Alphabet was down 6.14 percent , down 3.87%
Luxury stocks include Capri Holdings, down 4.77 percent, Nike, down 3.7 percent, and Ralph Lauren down 3.43 percent.
Boeing shares rose 2.81% as the company forecast deliveries of 400-450 Boeing 737s next year, up from 375 this year. It has $3-5 billion in cash flow next year. That’s well above the $1.5-$2.0 billion projected for this year.
Investors are eyeing the release of US non-farm payrolls for October on Friday. Although analysts predict that the number of jobs will increase by only 205,000 in October. after adding 263,000 jobs in September
