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US stocks mostly lower on tech slump, Fed signals no rush to cut rates

Renton Campoy by Renton Campoy
August 13, 2024
in Other News
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Top 5 Things to Watch in Markets in the Week Ahead
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US stocks mostly lower on tech slump, Fed signals no rush to cut rates
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Investing.com — U.S. stocks were mostly lower Wednesday, as the Federal Reserve’s signal that there wasn’t a need for sooner rate cuts added further fuel to the tech-led selloff following underwhelming results from Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT).

By 14:35 ET (19:35 GMT), the Dow Jones Industrial Average rose 62 points, or 0.2%, while S&P 500 fell 0.9%, and Nasdaq Composite slipped 1.4%.

Fed signals no rush to cut rates, but Treasury yields remain in red

In blow to sentiment for sooner rather than later rate cut, the Fed said it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

The updated view on monetary policy arrived on the heels of unchanged rate decision that was largely expected. Despite the less dovish than expected monetary policy statement, Treasury yields continued to languish in the red, with the Fed rate-sensitive 2-year Treasury yield falling 9.7% to 4.262%.

The Fed statement followed the ADP National Employment report showing that 107.000 jobs were added to private payrolls in January, slightly less than expected, though the JOLTS report a day earlier pointed to an unexpected rise in December job openings.

Alphabet weighs heavily on tech sector

Hitting the markets Wednesday, and the tech-heavy Nasdaq in particular, has been the pullback in Alphabet (NASDAQ:GOOG) shares after the tech giant reported quarterly results after the close Tuesday.

Alphabet stock fell over 6% after the YouTube-parent said that spending would be “notably larger” in 2024, as it attempts to build out its AI offerings at its key advertising and cloud services units.

Tesla (NASDAQ:TSLA) stock cut losses to gain 0.1% after a judge in the U.S. state of Delaware threw out CEO Elon Musk’s huge $55.8 billion Tesla package, saying that awarding such an “unfathomable sum” was not fair to shareholders.

Should the ruling be upheld, Musk would lose options to more than 303 million Tesla shares, or roughly about 10% of the company and well below his previously stated goal of 25% ownership.

Elsewhere, Boeing (NYSE:BA) stock rose over 6% after the embattled aircraft manufacturer delayed the release of its 2024 financial forecasts, with CEO Dave Calhoun saying it still has “much to prove” to win back the confidence of both regulators and passengers in the wake of a dangerous mid-air door plug breach earlier this month.

Earnings from chipmaker Qualcomm (NASDAQ:QCOM) are due after the close.

(Peter Nurse Oliver Gray contributed to this article.)

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Source: Investing.com

Renton Campoy

Renton Campoy

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