Note: Figures recorded at 7:40am AEDT. Updated figures and a video recording will be available at 9am AEDT.
The S&P 500 fell on Wednesday as Alphabet led a sell-off in technology shares. The market gyrated in afternoon trading as investors evaluated the latest Federal Reserve rate decision.
The S&P 500 was down 0.5% with tech shares like Alphabet and AMD the biggest losers. The Nasdaq Composite lost 0.8%. The Dow Jones Industrial Average added 51 points, or 0.1%, aided by rebound in Boeing share following its results.
The Fed kept rates unchanged and stated it was not yet confident enough to start cutting rates yet. The Committee’s statement said it does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.
Chairman Jerome Powell also commented that the Fed’s policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint, at some point this year.
Treasury yields fell on the day following the Fed’s statement with the 10-year Treasury yields cracking 4%.
Shares of Alphabet dropped more than 6% and were on pace for their worst day since Oct. 25 as disappointing ad revenue overshadowed better than expected earnings and sales. Peer tech names Microsoft and AMD slipped 1.5% and 1.8%, respectively, on lower-than-expected forward guidance after posting quarterly results.
Shares of Boeing climbed nearly 6% following quarterly results that beat analyst estimates on the top and bottom line. The company has been plagued by recent issues tied to its 737 Max 9 which has pushed Boeing to focus on safety moving forward, Boeing CEO Dave Calhoun said.
Oil prices are on pace to book the first monthly gain since September as the U.S. and Iran stand on the brink of a more direct confrontation in the Middle East. The West Texas was last down $1.77, or 2.27%, to trade at $76.05 a barrel. Brent was trading at $81.77 a barrel, down $1.10 or 1.33%. China factory activity contracted for the fourth consecutive month raising demand concerns, while U.S. crude inventories rose by 1.2 million barrels last week.
Bank of America has cut its forecasts for lithium. The bank is concerned that operators are focused on preserving margins through cost management rather than cutting production and that lithium has not found a bottom yet. The bank has cut its forecast for spodumene in 2024 by 63.1 per cent to $US650 a tonne from $US1763 and his 2025 forecast by 34 per cent to $US1438 a tonne from $US2188.
Currency
One Australian dollar at 7.35am was buying 65.56 US cents.
Figures around the globe
European markets closed lower. London’s FTSE fell 0.47 per cent, Frankfurt lost 0.40 per cent, and Paris closed 0.27 per cent lower.
Turning to Asian markets, Tokyo’s Nikkei gained 0.61 per cent, Hong Kong’s Hang Seng dropped 1.39 per cent and China’s Shanghai Composite fell 1.48 per cent lower.
Yesterday, the Australian share market closed 1.06 per cent higher at 7,680.72.
Ex-dividends
NB Global Corporate Income Trust (ASX:NBI) is paying 1.2179 cents unfranked
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
