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Summary
- The US benchmark equity indices witnessed a steep decline on Wednesday as the Federal Reserve announced its January monetary policy commentary and weak earnings.
- The Dow Jones Industrial Average finally ended down 633.87 points at 30,303.17, while the S&P 500 dropped 2.57 per cent to 3,750.77. NASDAQ Composite settled 0.050 per cent down at 141.20.
- Microsoft’s shares ended up 0.25 per cent, Starbucks’ stock closed down 6.51 per cent.
The US benchmark equity indices slipped steeply on Wednesday as the investors reacted to the Federal Reserve’s January monetary policy commentary and weak earnings. The Federal Reserve kept the interest rates unchanged at near-zero. Fed said that the rates would be left unchanged until the inflation and labour market trends meet its targets. The US central bank also said that it would continue with the asset purchase program.
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While the Dow Jones fell 700 points in the intraday trade to record its biggest drop in three months, the S&P 500 gave up all gains to turn negative in 2021. In today’s session, the Dow Jones Industrial Average finally ended down 633.87 points at 30,303.17, while the S&P 500 dropped 2.57 per cent to 3,750.77. NASDAQ Composite settled 0.050 per cent down at 141.20.
On Tuesday, the S&P 500 had plunged from its all-time high to close at 3,849.62, down 0.15 per cent. While the Dow Jones ended 0.074 per cent lower at 30,937.04, the NASDAQ Composite dipped 0.073 per cent to settle at 13,626.06.
Gainers and losers
Microsoft’s shares ended up 0.25 per cent after the tech major reported robust quarterly results. The sales increased by 17 per cent (Y-O-Y) in its fiscal second quarter. GameStop shares continued their strong run and ended higher 138.01 per cent. Shares of Express and Bed Bath & Beyond also surged. AMC shares rose over 300 per cent to hit the highest level since 2018.
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Starbucks’ shares closed down 6.51 per cent after the coffee chain said that its same-store sales fell 5 per cent in the quarter. Boeing shares closed down 3.97 per cent after its 2020 net loss touched a record $11.9 billion. The shares of AMD tumbled more than 7 per cent.
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Apple, Facebook and Tesla are scheduled to report their earnings after the closing bell today.
Inflation may surge soon
Meanwhile, Federal Reserve Chair Jerome Powell said that the Fed expected the inflation to surge in the next few months.
The durable goods orders saw a 0.2 per cent rise in December over November, after an upwardly revised increase of 1.2 per cent in November.
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