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US stocks climb as Powell says rate cuts remain on table this year

Published 03/04/2024, 00:58
Updated 03/04/2024, 19:28
© Reuters. U.S. stocks climbed Wednesday, after Federal Reserve chairman Jerome Powell said rate cuts remain on the table for this year, easing some investor fears that the recent strength of the economy would persuade the Fed chief to turn more hawkish.     

At 14:22 ET (19:22 GMT), Dow Jones Industrial Average rose 14 points, or 0.1%, S&P 500 added 0.3%, while Nasdaq Composite 0.5%. 

Powell keeps rate hike hopes alive to cool climb in Treasury yields

Powell said Wednesday most voting Fed participants support lowering interest rates at some point this year, but not until the central bank has greater confidence from incoming data that inflation is on a sustainable move lower. 

In a sign that the Fed chief continues to believe a soft landing for the economy remains intact, Powell said recent data pointing to strong economic growth and hotter inflation haven't materially changed the Fed's outlook, which continues "to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path."

Treasury yields were lower, but above the lows of the day, with the yield on the 2-year Treasury 1.6 basis points to 4.685%, while the 10-year Treasury yield 4 basis points to 4.359%. 

The remarks arrived hours after data showed the U.S. private sector added far more jobs than expected in March, as private sector employment increased by 184,000 jobs last month, according to payrolls processor ADP.

This was the largest increase in hiring since July, above the 148,000 expected, with job gains strong across industries with the exception of professional services.

Intel slumps after foundry losses weigh 

Intel (NASDAQ:INTC) fell more than 7% after it disclosed $7 billion in operating losses for its foundry business through 2023, as it lost out more business to Asian rivals including TSMC (NYSE:TSM) and Samsung Electronics Co Ltd (KS:005930). 

The update comes ahead of the chipmaker's earnings slated for Apr. 25, which would likely reflect the headwinds including a loss of server market share to AMD (NASDAQ:AMD).  

"We would note we currently see more headwinds than tailwinds in 1H'24 given a less robust PC market, any apparent standard server pickup potentially muted by share shift towards AMD, continued difficulties for Altera, and a seemingly poor automotive market (weighing on Mobileye)," Wedbush said in a note.

Tesla (NASDAQ:TSLA) rose 0.8%, though sentiment on the stock remains sour after the electric vehicle maker clocked a quarterly decline in deliveries for the first time in nearly four years.

Taiwan Semiconductor Manufacturing (NYSE:TSM) stock rose 1.4% after a severe earthquake on the island prompted the chip maker to halt production at some of its facilities.

Disney 's Igor wins board battle against activist Nelson Peltz; Cal-Maine impresses on earnings stage

Walt Disney Company (NYSE:DIS) fell more than 2% after shareholder voted in favor of retaining a slew of board members fending off a challenge from Nelson Peltz’s hedge fund, Trian Fund Management.

Peltz sought to win to two board seats after questioning the board's strategic and capital allocation decisions. 

Cal-Maine Foods (NASDAQ:CALM) stock rose 3.2% after the chicken egg producer reported strong quarterly results, as record sales overcame falling egg prices.

Paramount Global (NASDAQ:PARA) fell 1.3% after a report said the media giant has been discussing entering into talks with David Ellison, the founder of the Skydance media company, for a potential deal.

(Ambar Warrick contributed to this article.)

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