Stocks waver after lighter reading on Fed’s key inflation gauge

U.S. stocks were shaky at the open on Thursday as December trading began, despite signs of a slowdown in inflation and the extent of inflation. the rate of the month.

The S&P 500 rose 0.2%, while the Dow Jones Industrial Average fell 0.3%. The tech-heavy Nasdaq Composite gained 0.4%. In other pockets of the market, the US dollar index retreated from a three-month low, and the US Treasury yield remained unchanged after a reduction in interest rates.

The consumer price index (PCE) – the Federal Reserve’s closest measure of inflation – rose 0.2% in October, less than expected.

Claims for unemployment insurance fell last week, holding near historic lows. Initial jobless claims, the most timely snapshot of the labor market, came in at 225,000 for the week ended Nov. 26, down 16,000 from the revised level of the previous week, Labor Department figures showed Thursday.

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Thursday’s move followed the previous session’s key averages after Powell’s speech in Washington, DC, where he indicated that US central bank officials may lower interest rate hikes. end of the year this month to 50 basis. point. Wednesday saw the S&P 500 jump 3.1%, the Dow rise 2%, or more than 700 points – and exit the bear market – and the Nasdaq rose 4.4%.

“It makes sense to moderate our rate of growth as we approach the level of restraint that will be sufficient to lower inflation,” said Powell, speaking at the Brookings Institution, while acknowledging the “uncertainty” of money consolidation. “The time to confirm the increase in interest rates may come as soon as the December meeting.”

Powell’s comments are likely to be his last public remarks before Federal Reserve officials enter a shutdown period – a period that limits public speaking before policy-setting meetings – before its next meeting on December 13-14.

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“The focus now shouldn’t be on speed, but how much rates need to go and how long they need to stay there,” said Jason England, portfolio manager of international bonds. national at Janus Henderson Investors. “Because the Fed needs to see ‘more evidence’ that inflation is falling before it stops and Powell concluded his speech by saying that ‘history is a strong warning against premature easing policy,’ the rate cut -price is ahead of time.”

WASHINGTON, DC - NOVEMBER 30: US Federal Reserve Chairman Jerome Powell speaks at the Brookings Institution, November 30, 2022 in Washington, DC.  Powell discussed the economic outlook, inflation and the labor market.  (Photo by Drew Angerer/Getty Images)

WASHINGTON, DC – NOVEMBER 30: US Federal Reserve Chairman Jerome Powell speaks at the Brookings Institution, November 30, 2022 in Washington, DC. Powell discussed the economic outlook, inflation and the labor market. (Photo by Drew Angerer/Getty Images)

Sentiment rose on Thursday as concerns about China’s zero-covid outbreak eased after Vice Premier Sun Chunlan, a senior government official, urged “improvement” in the response to the virus. virus in the country as the pathogen weakens.

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Meanwhile on the corporate side, all eyes are on Salesforce (CRM) after news that Co-Chief Executive Officer Bret Taylor will leave in January and co-founder Marc Benioff will be the sole CEO. Shares were down 10% at the start of trading.

Shares of Snowflake ( SNOW ) rose 3%, even though the company’s fourth-quarter earnings forecast missed expectations for lower technology spending.

Alexandra Semenova is a reporter at Yahoo Finance. Follow him on Twitter @alexandraandnyc

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