U.S. stocks fell on Thursday in a pessimistic start to December as fears of a recession seemed to outweigh falling inflation and signals that the pace and magnitude of rate hikes were slowing from the start. end of this month.
The S&P 500 (^GSPC) slipped 0.2%, while the Dow Jones Industrial Average erased more than 350 points, or 1%. The tech-heavy Nasdaq Composite was just below breakeven. In other pockets of the market, the US dollar index fell to a three-month low and US Treasury yields were flat after steep declines.
The core personal consumption expenditure (PCE) price index – a measure of inflation closely watched by the Federal Reserve – rose 0.2% in October, less than expected.
Meanwhile, unemployment insurance filings fell last week, holding near all-time lows. Initial jobless claims, the most timely snapshot of the labor market, stood at 225,000 for the week ended Nov. 26, down 16,000 from the revised level of the previous week, Thursday showed. Department of Labor figures.
Thursday’s moves follow flurries on the previous session’s leading averages on the heels of a speech by Powell in Washington, D.C., in which he signaled that U.S. central bank officials may lower the latest rise in interest rate for the year later this month to 50 basis points. Wednesday saw the S&P 500 rebound 3.1%, the Dow Jones rise 2%, or more than 700 points – and exit a bear market – and the Nasdaq jump 4.4%.
“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said, speaking at the Brookings Institution, while acknowledging the “mismatches uncertain” of monetary tightening. “The time to moderate the pace of rate hikes could come as early as the December meeting.”
Powell’s comments are likely the last public remarks he will make before Federal Reserve officials enter a blackout period — a period when policymakers limit public speaking ahead of a board meeting. policymaking – ahead of their next gathering on December 13-14.
“The focus should no longer be on the pace, but on the degree to which rates rise and how long they have to stay there,” said Jason England, global bond portfolio manager at Janus Henderson Investors, in a note. “As the Fed will have to see ‘much more evidence’ that inflation is falling before pausing and Powell ended his speech by saying ‘history is a strong warning against premature policy easing’, pricing reductions is premature.”
Sentiment was bolstered on Thursday by easing concerns over zero-COVID unrest in China after senior government official Deputy Prime Minister Sun Chunlan called for an “optimization” of the country’s virus response as pathogenicity decreases.
Meanwhile, on the corporate side, all eyes were on Salesforce (CRM) following the announcement that co-CEO Bret Taylor would step down in January and co-founder Marc Benioff would become sole CEO. . Shares plunged 10% in early trading.
Shares of Snowflake (SNOW) rose 3% even as the company’s fourth-quarter product revenue forecast missed estimates on an expected slowdown in technology spending.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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