Fed Chair Powell's Comments Halt Wall Street's Rally
Wall Street's main indexes slipped after Jerome Powell, Federal Reserve Chair, indicated no haste in cutting interest rates. His remarks impacted the probability of a rate cut decision at December's Fed meeting. Major sectors like industrials faced declines, while Disney saw a notable rally amid earnings optimism.
Wall Street's major indices saw a downturn on Thursday after Federal Reserve Chair Jerome Powell tempered investors' anticipation for a further interest rate cut this year. Speaking at a Dallas Fed event, he emphasized the U.S. central bank's ability to cautiously consider rate adjustments given the steady economy, robust job market, and inflation sitting above its 2% target.
Despite trader expectations of a 25-basis point cut in December, probability dropped significantly after Powell's statements, according to the CME FedWatch tool. Adam Hetts of Janus Henderson Investors noted the dampening effect on what once was an optimistic outlook for rate cuts.
Key market metrics slid; Dow Jones fell by 207.33 points, the S&P 500 lost 36.21 points, and the Nasdaq Composite dropped 123.07 points. Walt Disney stood out positively, surging 6% after outperforming earnings expectations, while industrials faced notable declines, mainly influenced by defense companies' performances.
(With inputs from agencies.)
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