(Reuters) – The New York Stock Exchange opened lower on Thursday as the Federal Reserve, which paused its monetary tightening cycle on Wednesday, signaled it could raise rates further in 2023.

In early trading, the Dow Jones index lost 21.50 points, or 0.06%, to 33,957.83 points and the broader Standard & Poor’s 500 fell 0.21% to 4,363.24 points.

The Nasdaq Composite lost 0.43%, or 58.80 points, to 13,567.68.

The U.S. Federal Reserve left key rates unchanged on Wednesday, the first since March 2022, but opened the door to two more hikes of a quarter-point each by the end of the year in the face of continued weakness. inflation and the strength of the economy.

Traders estimate a 69% chance of a 25 basis point rate hike in July, up from around 60% a day earlier, according to CME’s Fedwatch tool.

The economic indicators published Thursday before the opening of the Stock Exchange also testify to the strength of the economy: retail sales in the United States rose unexpectedly in May despite pressure from inflation and rising interest rates, while weekly jobless claims remained stable last month

Manufacturing activity in the New York area unexpectedly rebounded in June.

“To admit that one is surprised that Fed policy so far has not cooled a hot labor market is in fact signaling that higher rates are even more necessary and may be supported by the economy as it slides into a soft landing,” said Charles Hepworth, chief investment officer at GAM Investments.

In stocks, restaurant chain Domino’s Pizza gained 4.9% after Stifel raised its recommendation from “hold” to “buy”.

The supermarket chain Kroger, which published its quarterly results on Thursday, however lost 3.6%.

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(Written by Diana Mandiá, Editing by Kate Entringer)

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