Wall Street Edges Lower Amid Fed Rate Speculation/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks drifted lower Wednesday following the S&P 500’s 1.1% drop the day before, driven by concerns over inflation and interest rates. Treasury yields made smaller moves, with the 10-year yield edging up to 4.71%, as Fed Governor Christopher Waller reiterated support for rate cuts in 2025. Wall Street eyes Friday’s jobs report and upcoming earnings season for clearer economic signals.
Wall Street’s Market Moves: Quick Looks
- Index Performance: S&P 500 slipped 0.1%; Dow fell 115 points; Nasdaq barely moved.
- Treasury Yields: The 10-year yield rose slightly to 4.71%, while the two-year dipped to 4.28%.
- Fed Comments: Christopher Waller supported more rate cuts despite recent inflation stubbornness.
- Economic Data: Hiring slowed in December, but jobless claims fell below expectations.
- Stock Highlights: Cal-Maine Foods jumped 6.4% on better-than-expected earnings.
Wall Street Edges Lower Amid Fed Rate Speculation
Deep Look
Wall Street extended its cautious slide Wednesday, with major indexes showing modest declines following a rough Tuesday. Investors are closely watching economic data and Federal Reserve commentary for hints about the future trajectory of interest rates and inflation.
Stock Market Recap
The S&P 500 edged down 0.1% in early trading after a 1.1% drop the day before. The Dow Jones Industrial Average fell 115 points (0.3%), while the Nasdaq Composite remained relatively flat, up by less than 0.1%.
These moves reflect ongoing investor concerns that the Federal Reserve may hold off on further rate cuts if inflation proves more persistent than expected.
Treasury Yields Stay in Focus
Treasury yields, which have been a central driver of Wall Street activity, made more moderate moves Wednesday. The 10-year Treasury yield, a benchmark for borrowing costs, rose to 4.71% from 4.69%. Meanwhile, the two-year yield, which closely tracks Fed expectations, dipped slightly to 4.28%.
Fed Governor Christopher Waller’s remarks at a speech in Paris played a key role in shaping market sentiment. Waller maintained his support for continued rate cuts in 2025, provided inflation trends downward. He dismissed concerns that proposed tariffs under President-elect Donald Trump would have a lasting impact on inflation.
“If the outlook evolves as I have described here, I will support continuing to cut our policy rate in 2025,” Waller said.
Economic Reports Add Complexity
Two key economic reports released Wednesday offered mixed signals:
- Hiring Trends: Employers slowed hiring in December more than economists expected, a potential sign of cooling in the labor market.
- Unemployment Claims: Fewer workers filed for unemployment benefits last week, underscoring the job market’s overall resilience.
Investors are now focused on Friday’s comprehensive jobs report, which could offer more clarity on labor market conditions.
Market Highlights
- Cal-Maine Foods: The egg producer climbed 6.4% after reporting stronger-than-expected quarterly profits, benefiting from increased demand during the holiday season. CEO Sherman Miller noted that sales rose due to seasonal baking demand and higher egg prices stemming from a bird flu outbreak.
- Delta Air Lines: Investors are looking ahead to Delta’s Friday earnings report, which will provide a preview of the upcoming corporate earnings season.
Global Market Performance
International markets were mixed. South Korea’s Kospi gained 1.2%, but Hong Kong’s Hang Seng slipped 0.9%. European indexes also weakened as global investors processed similar concerns over inflation and interest rates.
Looking Ahead
With Wall Street closed Thursday to honor former President Jimmy Carter, Friday’s jobs report looms large as the week’s pivotal moment. Markets will also turn their attention to the corporate earnings season kicking off next week, starting with major banks.
You must Register or Login to post a comment.