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Wall St gyrates after Fed holds US rates steady, says no cuts imminent

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© Reuters. Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 29, 2024. REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) -U.S. stocks veered after the Federal Reserve held interest rates steady while hinting that no rate cuts were imminent.

The three major U.S. stock indexes were already weighed down by weakness in tech and tech-adjacent megacap stocks the day after disappointing Alphabet (NASDAQ:) results. All three turned lower ahead of Fed Chair Jerome Powell’s Q&A session, expected to begin shortly.

As expected, the Federal Open Markets Committee (FOMC) left its key policy rate unchanged at 5.25%-5.50% against a backdrop of gradually cooling inflation and a resilient economy.

In its accompanying statement, the FOMC said it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence,” a blow to market participants who were hoping for a dovish pivot as early as March.

“There were no surprises in the Fed statement,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “It does appear that further rate hikes are off the table, which is a positive, but investors should continue to expect higher for longer as we’re still quite a ways away from the sort of economic data that would push the Fed to lower rates.”

At 02:10 p.m. the fell 61.72 points, or 0.16% , to 38,405.59, the lost 46.13 points, or 0.94%, to 4,878.84 and the lost 222.88 points, or 1.44%, to 15,287.02.

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