PARIS (Reuters) – The New York Stock Exchange fell on Thursday the day after monetary policy announcements from the Federal Reserve, whose restrictive bias worried investors.
In early trading, the Dow Jones index lost 110.98 points, or 0.32% to 34,329.90 points and the broader Standard & Poor’s 500 fell 0.65% to 4,373.48 points.
The Nasdaq Composite lost 1.05% or 141.07 points, to 13,328.057 points.
The Fed decided Wednesday to maintain the fed funds rate target at 5.25%-5.50%, while warning that it could raise it again if inflation proves more persistent than expected.
Separately, economic projections that accompanied the rate decision showed that the central bank expected inflation to remain above its target for longer than expected in its previous forecast, in June.
Inflation would only return to 2% in 2026, which could push the Fed to keep its rates high for longer: the central bank estimates that rates will only fall by 50 basis points in 2024, compared to 100 bps previously forecast . “In its new projections, the FOMC shows greater confidence in the ‘soft landing’ scenario, which reduces the extent of the rate cuts envisaged in 2024 and 2025”, summarizes Bruno Cavalier, chief economist at Oddo BHF.
On the values side, FEDEX climbed 4.77% after reporting a 32% jump in its adjusted profit for its first fiscal quarter.
Alphabet plans to stop sourcing chips for artificial intelligence from Broadcom from 2027, which will cause the group to lose 2.4%, and could turn to Marvell Technology which gains 1.25%, reports The Information on Thursday .
(Written by Corentin Chappron, edited by Blandine Hénault)
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