The First Slice for Tuesday, February 6, 2024
U.S. stocks faced a dip on Monday as Federal Reserve Chair Jerome Powell emphasized that the central bank would take a cautious approach to interest-rate cuts during a television interview over the weekend. This development comes after a recent stock market rally driven by robust big-tech earnings. Dow components like Caterpillar Inc. and McDonald’s Corp. released their earnings reports, contributing to the market’s assessment.
- The Dow Jones Industrial Average fell 274.30 points, or 0.7%.
- The S&P 500 declined 15.80 points, or 0.3%.
- The Nasdaq Composite went down 31.28 points, or 0.2%.
The Institute for Supply Management reported that its services index rose to 53.5% in January, signaling economic strength, which was unexpected by Wall Street economists. This strong data has raised questions about the likelihood of immediate rate cuts by the Federal Reserve. Powell’s statements have further indicated that an early rate cut, initially anticipated for March, is improbable.
Investors are now advised to pay less attention to the Fed’s moves and focus more on solid earnings, which have been the foundation of the recent market rally. Additionally, the release of strong U.S. payroll data in January, revealing the creation of 353,000 jobs, has added to the skepticism surrounding rapid rate cuts.
Despite these market fluctuations, a significant portion of S&P 500 companies is reporting quarterly results, with more to come in the following week. U.S. regional bank shares also saw a decline on Monday, impacted by Powell’s remarks, with the SPDR Regional Banking ETF down 1.7%, compounding a 7.2% drop from the previous week………..
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