Dow Cuts Some Gains as Tech Stumbles to Offset Fed-Infused Gains

Investing.com – The Dow eased from highs on Wednesday, as weakness in technology soured investor sentiment after the Federal Reserve signaled near-zero rates would continue at least through 2023. 

The Dow Jones Industrial Average rose 0.47%, or 130 points. The S&P 500 was flat, while the Nasdaq Composite slipped 0.65%.

Tech took a  breather following its strong start to the week, with Apple (NASDAQ:AAPL) falling more than 2% a day after unveiling new iPads and Apple watches and a new bundled subscription service as well as a personalized workout service.

Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) were also lower.

The weakness in tech pressured the broader market to retreat from session highs offsetting optimism from an ongoing pledge of monetary policy from the Fed.     

The Federal Open Market Committee left its benchmark rate unchanged in the range of 0% to 0.25% and said it would target inflation to run above 2% for some time. 

“With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent,” The Fed said in a statement. 

The latest economic projections from the Fed appear to support expectations for rates to remain lower for longer, with policymakers backing the central bank to keep its benchmark rate unchanged at 0.1% through 2023. 

Energy surged 4% as U.S. oil prices rallied after crude inventories fell by 4.4 million barrels last week, confounding expectations for a build of 1.27 million barrels.

EOG Resources (NYSE:EOG), TechnipFMC (NYSE:FTI) and Diamondback Energy (NASDAQ:FANG) were among the biggest gainers, with the latter rising more than 7%.

Financials also climbed higher even as Treasury yields stuttered on expectations the Fed will keep rates unchanged and back a lower-for-longer interest rate

Read More Here...

Bookmark the permalink.

Comments are closed.