The Dow Jones retreated after Powell signaled that the Federal Reserve would not rush to cut interest rates.
U.S. stocks opened trading on a soft note on Monday, moving lower after Federal Reserve Chairman Jerome Powell reiterated in a TV interview that the central bank would take its time implementing interest rate cuts.
Investors also weighed in on Dow parts Caterpillar Inc. CAT,
and McDonald’s Corporation MCD;
After megacap tech profits led stock market rally.
what’s the matter
The Dow Jones Industrial Average DJIA fell 147 points, or 0.4%, to 38,507.
The S&P 500 SPX index fell 11 points, or 0.2%, to 4,948.
The Nasdaq Composite Index fell 32 points, or 0.2%, to 15,598.
On Friday, the Dow reached its ninth record closing date in 2024. Meta Platforms Inc. Results of META,
and Amazon.com Inc. AMZN,
It helped the S&P 500 close for its seventh record close of the year.
market drivers
Friday also saw US payroll data released, showing a surprisingly strong 353,000 jobs created in January. The rally in U.S. stocks despite bond market weakness sparked by the jobs report shows the market is focused on earnings, according to Mike Wilson, U.S. equity strategist at Morgan Stanley.
“We believe quality growth will continue to outperform even amid strong earnings revisions, especially compared to lower-quality cyclical and small-cap stocks. The current sentiment within the stock market is that a tight interest rate environment will be a disproportionate headwind for stocks with poor balance sheets and limited pricing power, i.e. those in a sector dominated by low-quality cyclical stocks and small-cap stocks. ” he said in the note.
see: Stock market investors are concerned that a ‘landless’ economy could spell trouble. What are your future plans?
Powell appeared on “60 Minutes” and again refuted the idea that the central bank would cut interest rates in March.
“The Powell interview did not help overall market sentiment,” said Bob Savage, head of market strategy and insights at BNY Mellon, and the mixed reading of the European Purchasing Managers’ Index (PMI) did not help either. He said this shows that growth is still weak. .
“Today’s focus is partly on (fourth quarter) earnings and whether more major players are as bullish as Big Tech,” Savage wrote.
According to FactSet, 46% of S&P 500 companies reported quarterly results this earnings season. The company said 104 S&P 500 companies, including four Dow companies, will report earnings over the next week.
Revenue Observation: Fourth quarter performance is almost half. Overall results have improved.
The ISM Services report provides more economic data. Last month, the report raised concerns about the economy after showing unusually low figures in the employment sector.
A company that attracts attention
Shares of Caterpillar jumped further into record territory after the construction and mining equipment maker reported a much higher-than-expected fourth-quarter profit, driven by particular strength in its energy and transportation businesses. The stock price rose 5%.
McDonald’s shares fell 2.9% after the fast-food giant missed sales and same-store sales estimates from Wall Street analysts, citing the impact of wars in the Middle East.
stock Tyson Foods Inc.
TSN,
+6.42%
The parent company of food brands Tyson, Hillshire Farm, Jimmy Dean and Ball Park rose 7.3% after beating profit estimates for its fiscal first quarter, breaking its fifth straight sales slump.stock Estee Lauder Course.
that,
+14.70%
The beauty products company surged 13.3% after reporting fiscal second-quarter profits that significantly beat expectations, despite continued challenges in Asian markets.
