NEW YORK (AP) — U.S. stock indexes record Concerns over high interest rates weighed on markets on Wednesday.
The S&P 500 fell 14.40 points, or 0.3%, to 5,307.01, a day after hitting a new all-time high. The Dow Jones Industrial Average fell 201.95 points (0.5%) to 39,671.04, the day after setting a new all-time high, and the Nasdaq Composite Index fell 31.08 points (0.2%) after setting a new all-time high. It became 16,801.54.
The index was close to flat early in the day, but the decline slowed after the Federal Reserve released the minutes of its last policy meeting, which showed disappointment for the market. Fed officials He said it would likely take longer than previously thought to fully contain inflation, which was disappointingly high at the start of the year.
Federal Reserve Chairman Jerome Powell said after the meeting that the Fed was more likely to cut rates than raise them, but the minutes noted that “various participants” were open to raising rates if inflation worsened. The cut rekindled Wall Street hopes that the Fed could raise rates. lower key interest rates At least once this year.
One of the market’s biggest losses came from Target, which fell 8% after the retailer reported its latest quarterly profits. It wasn’t enough exceeded analysts’ expectations. It also provided a range of expected future profits as customers cut back on non-essential purchases, but the median was lower than analysts expected.Earlier this week, Target price reduction It offers thousands of daily necessities to attract customers still struggling with high levels of inflation.
Lululemon Athletica’s stock price fell 7.2% after chief product officer San Cho announced he would be leaving the company this month to “pursue other opportunities.” The company announced a new organizational structure that will not replace the chief product officer role.
These helped counter a 17.6% jump for Petco Health & Wellness, which reported better latest quarter results and revenue than analysts had feared.
Off-price retailer TJX rose 3.5 percent after beating profit estimates. The operator of TJ Maxx and Marshalls also raised its full-year earnings per share outlook, saying prices were helping to attract customers.
In the bond market, the yield on the 10-year Treasury note rose to 4.42% from 4.41% late Tuesday. The yield on the two-year note, which moves in line with Fed expectations, rose even further, to 4.87% from 4.84%.
Helping to limit the rise in yields was the fact that the harsh remarks in the minutes of the Fed’s most recent meeting were from May 1st. That was before some reports indicated that inflation may be softening and that parts of the U.S. economy may be changing. Here’s what some Fed officials think.
In recent speeches since the May 1 meeting, some Fed officials have said the recent reports were indeed encouraging, but also said they would need several more months of improving data before they could lower the federal funds rate, which is at its highest in more than two decades.
The Fed is trying to walk a tightrope between slowing the economy enough through high interest rates to keep inflation in check, but not slowing it down enough to cause a severe recession.
Rising interest rates are making everything from credit card payments to car loan payments more expensive. Mortgage interest rates are also high, according to Wednesday’s report. Sales of used homes were sluggish. Last month’s performance exceeded economists’ expectations.
Bank of America strategist Athanasios Vambakidis said central banks around the world appear to be willing to cut interest rates, but given the strength of the economy and still-high inflation rates, “it’s unlikely to go that far.” “I might not be able to make it.” He said in a report from BofA Global Research that he expects any rate cuts to be shallow and that they may come later than financial markets expect.
In overseas stock markets, stock indexes in many countries in Europe and Asia fell slightly.
London’s FTSE 100 fell 0.5 percent after the Office for National Statistics announced better-than-expected economic growth. inflation reading This dampened hopes for a rate cut in June. Tokyo’s Nikkei Stock Average fell 0.8%. Japan reported The trade deficit increased last month.
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AP writers Matt Ott and Jimmo Zhong contributed.
