Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

S&P 500 Erases Gains to Close Lower as Powell Relights Fed Hike Jitters

Stock MarketsJan 26, 2022 22:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed lower Wednesday, as tech gave up some gains on surging U.S bond yields after Federal Reserve Chairman Jerome Powell hinted that there was plenty of runway to raise rates, with the first hike widely expected in March. 

The S&P 500 fell 0.2%, after rising about 2% intraday. The Dow Jones Industrial Average fell 0.4%, or 129 points, and the Nasdaq was flat, erasing a 3% gain.

In his press conference that followed the Fed decision, Powell said there was "quite a bit of room to raise rates without hurting jobs," stoking expectations that the Fed's plan to tighten monetary policy measures, which have underpinned risk assets, may be more aggressive than expected. 

The remarks arrived after the Fed said in a statement that it may "soon" be appropriate to raise rates, and confirmed plans to end its bond purchasing program in early March.     

"With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate," the Fed said in a statement. 

U.S. bond yields surged, putting a dent in growth sectors of the market like tech, with the U.S. 10-year Treasury yield.   

Microsoft (NASDAQ:MSFT), which was up more than 5% intraday, gave up some gains after the tech giant delivered an optimistic outlook on revenue following better-than-expected Q2 results.

For the third-quarter, Microsoft guided revenue between $48.5 billion and $49.3 billion, compared with Wall Street estimates for $48.9 billion.

“Microsoft's cloud guidance was stronger than the Street and when factoring in F/X headwinds we would characterize this as a blowout guide in terms of how investors will digest these numbers” Wedbush said in a note.

The bullish results from the Microsoft helped steady sentiment on growth sectors of the market including consumer discretionary following days of selling.

Tesla (NASDAQ:TSLA), which is set to quarterly results due after the market closes, was well off the highs to close 2% higher. 

Apple (NASDAQ:AAPL), which is set to report quarterly results on Thursday, ended the day roughly unchanged after paring gains. 

Boeing Co (NYSE:BA), down 4%, failed to join in on the broader market melt up after the aircraft maker reported a wider than expected loss in Q4 and revenue fell short of estimates as the delay deliveries of its 787 Dreamliner program hurt performance.

S&P 500 Erases Gains to Close Lower as Powell Relights Fed Hike Jitters
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email