The stock market was choppy after the Federal Reserve raised its expected interest rate by 25 basis points on Tuesday afternoon, and indices saw bigger moves when Chairman Jerome Powell made ready remarks.
The Dow Jones Industrial Average was flat and the S&P 500 rose 0.8% after the Fed’s announcement. The Nasdaq was up 1.5% while the Russell 2000 Small Cap Index was down 0.5%. Indicators reversed higher after Powell gave initial comments.
Trading volumes on both the New York Stock Exchange and the Nasdaq were higher for the same time on Tuesday.
The Dow held above its 50-day and 21-day exponential moving averages, while the S&P 500 traded above its 200-day moving average. The NASDAQ found support at the 200-day line.
The Invesco QQQ Trust ETF is a highly qualified technology fund on the Nasdaq 100 Index (QQQ) added 0.1%.
Crude oil fell 3.1 percent to $76.43 a barrel. SPDR power strip selection (xle) the ETF lowered 2.6%.
The 10-year Treasury yield fell 4 basis points, to 3.47%.
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The Fed raised rates 25 basis points, no surprise there
The Federal Reserve announced that it was raising interest rates by a quarter of a percent, as expected. The move put the federal funds rate in a range of 4.5%-4.75%. The 25 basis point move is smaller than the half-point increase in December and the four consecutive 75 basis point increases in 2022.
Members acknowledged the improvement in inflation numbers, but that did not change their sentiments significantly, in a statement released after the meeting.
“The committee expects continued increases” in interest rates to be “appropriate to reach a sufficiently restrictive stance on monetary policy,” the statement said.
Markets expect another 25 basis point hike in March, which would push the Fed Funds rate to 4.75%-5%, and then take a break for assessment. The March move would put the price closer to the Fed’s target rate of 5%-5.25%, as they feel they can take a break to let the economy absorb the moves.
But officials also said they would base their decisions on how the economy performs in the coming months.
Powell reiterated that inflation is still too high for comfort and that it will take much longer to bring it down.
The job market is getting mixed signals
The ADP employment report for January showed private payrolls increasing by just 106,000 versus forecasts of 158,000, well below December’s strong revised payrolls of 253,000. The increase is the smallest in two years, according to the Commonwealth Financial Network. The decrease can be attributed to factors including seasonal layoffs and weather-affected jobs.
On the other hand, the December Job Openings and Labor Turnover report came in at 11.012M against a consensus of 10.2M.
The ISM Manufacturing Index was at 47.4 vs. 48.0 expected, down from 48.4 in December. The decline indicates a further deterioration in the manufacturing sector. The index aggregates and measures new orders, production, hiring, supplier deliveries and inventories from nearly 300 US factories.
Stock Market: AMD Pops, Snap Plugs
Semiconductor Corporation advanced micro devices (AMD) rose 9.5% on heavy volume, after better-than-expected fourth-quarter earnings-per-share and sales numbers were reported on Tuesday after the market closed. The jump pushed the stock beyond the 200-day line, where it found support. AMD is the leader in the S&P 500 today.
Electronic Arts (EA) fell 11.7% after reporting an EPS loss in the December quarter but outpaced sales. The video game publisher has announced that it will Star Wars game delay and halt development of two mobile games. The decline pushed the stock below the 50-day and 200-day lines.
Electrical Products Company I reckon (ATKR) rose 12.2% after reporting a beat on its first-quarter and first-quarter fiscal earnings. blew past stock a Flat base with 128.46 Point purchase.
Western Digital (WDC) fell 3.7% after reporting a December quarter earnings loss but outperformed sales. It also provided lower-than-expected third-quarter revenue guidance. The decline sent the stock below the 200-day moving average. The data storage hardware manufacturer is the big loser in the S&P 500 today.
Snapchat’s parent company, pop (pop), down 12.7% after reporting a 36% drop in fourth-quarter profit and warning of a possible decline in current-quarter sales.
Stock Market Movers: Fitness stock jumps
Medical equipment manufacturer Striker (SYK) rose 6.9% on heavy volume after reporting better-than-expected fourth-quarter adjusted earnings and sales late Tuesday.
peloton (PTON) was up more than 22% in heavy volume based on a mixed Q2 2023 earnings report, and subscriber growth in the quarter. The interactive fitness equipment company gave upbeat comments.
Follow Kimberley Koenig for more stock news on Twitter @employee.
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