Dow and S&P 500 retreat despite Fed’s 0.5% rate cut

19Sep

Dow and S&P 500 retreat despite Fed’s 0.5% rate cut

 

US stocks experienced a volatile trading session overnight, ultimately closing lower despite an unexpected half-percentage-point interest rate cut by the Federal Reserve.

While the rate cut initially buoyed market sentiment, concerns about the potential for economic weakness tempered enthusiasm.

The Dow Jones Industrial Average declined by 103.08 points, or 0.25 per cent, to finish the day at 41,503.10. The S&P 500 lost 0.29 per cent to close at 5,618.26, and the Nasdaq Composite dropped 0.31 per cent to 17,573.30. Both the S&P 500 and the Dow briefly touched record highs following the Fed's announcement but subsequently retreated.

Turning to US sectors, all closed lower overnight except for Energy and Communication Services. Utilities was the worst performer.

In company news, Intuitive Machines' shares surged by 38 per cent following the announcement of a nearly $5 billion space network contract secured from NASA. United States Steel saw a 1.5 per cent increase in shares after reports that a US security panel allowed Nippon Steel to resubmit its $14.1 billion acquisition bid for the company, likely delaying the decision until after the November presidential election. Victoria's Secret gained 3.5 per cent, following Barclays' upgrade of the stock from underweight to equal weight, citing a more balanced risk/reward outlook with an anticipated 6 per cent potential upside.

The Federal Reserve lowered its benchmark interest rate to a range of 4.75 per cent to 5.00 per cent from 5.25 per cent to 5.5 per cent, marking the first rate cut in four years as inflation has eased from its recent peak. The central bank expressed confidence in its ability to achieve its employment and inflation goals, citing a sustainable downward trend in inflation.
Investors had increasingly anticipated a half-point rate cut in the lead-up to the Fed's decision, and the central bank delivered on those expectations. However, stocks were unable to maintain their initial gains.

Federal Reserve Chair Jerome Powell sought to alleviate concerns that the rate cut signalled an underlying economic weakness. He emphasised that the decision was primarily driven by a decline in upside risks to inflation. Powell stated, "I don't see anything in the economy right now that suggests that the likelihood… of a downturn is elevated."
 
Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7.25am was buying 67.62 US cents.

Commodities

Gold added 0.24 per cent. Silver fell 0.94 per cent. Copper added 0.61 per cent. Oil lost 0.39 per cent.

Figures around the globe

European markets closed lower. London’s FTSE lost 0.68 per cent, Frankfurt fell 0.08 per cent, and Paris closed 0.57 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.49 per cent, Hong Kong’s Hang Seng was closed, while China’s Shanghai Composite closed 0.49 per cent higher.

Yesterday, the Australian share market closed flat at 8142.  

Ex-dividends

Auswide Bank Ltd (ASX:ABA) is paying 11 cents fully franked
Centrepoint Alliance (ASX:CAF) is paying 1.75 cents fully franked
Count Limited (ASX:CUP) is paying 2.25 cents fully franked
Embelton Limited (ASX:EMB) is paying 20 cents fully franked
Enero Group Ltd (ASX:EGG) is paying 2 cents fully franked
IPD Group (ASX:IPG) is paying 6.2 cents fully franked
Lycopodium Limited (ASX:LYL) is paying 40 cents fully franked
Macmahon Holdings (ASX:MAH) is paying 0.6 cents fully franked
Mader Group Limited (ASX:MAD) is paying 4 cents fully franked
Midway Ltd (ASX:MWY) is paying 1.6 cents fully franked
Midway Ltd (ASX:MWY) is paying 14.5 cents fully franked
MotorCycle Holdings (ASX:MTO) is paying 7 cents fully franked
NRW Holdings Limited (ASX:NWH) is paying 9 cents fully franked
South32 Limited (ASX:S32) is paying 4.5662 cents fully franked
Tourism Holdings (ASX:THL) is paying 4.5855 cents unfranked

Dividends payable

Ashley Services Group Ltd (ASX:ASH)
Bapcor Ltd (ASX:BAP)
Helia Group Ltd (ASX:HLI)
Helloworld Travel Ltd (ASX:HLO)
Ingenia Communities Group (ASX:INA)
Maxiparts Ltd (ASX:MXI)
Praemium Ltd (ASX:PPS)
ResMed Inc (ASX:RMD)
Shaver Shop Group Ltd (ASX:SSG)
Sonic Healthcare Ltd (ASX:SHL)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2024 – Finance News Network


Source: Finance News Network

Share this post

Related Posts

23Jun

Western Areas (ASX:WSA) shares rise after exploration: ASX closes 0.2% higher

23 Jun 2020 - After some movement before mid-morning trade, the ASX spent the afternoon quite flat, managing to close 0.2% higher. Shares in Western Areas (ASX:WSA) continue to rise today after reports of significant widths of nickel and copper in South Australia. Shares in Challenger (ASX:CGF) dropped today - they announced they had successfully completed the $270 million fully underwritten institutional placement. SCA Property Group (ASX:SCP) reports the total value of their Investment Properties has decreased by $94.6...

Read More
06Jan

Tech sector drags on market: ASX tracking 0.7% lower at noon

06 Jan 2021 - The ASX opened lower this morning. the S&P/ASX 200 Index is 44 points down or 0.7% lower at 6,638. Futures are pointing to a fall of 24 points. Afterpay (ASX:APT) shares dropped today dragging down the tech sector. Shares in Oil Search (ASX:OSH) are doing well on the back of the oil price rise.

Read More
19Jul

Major indexes fall as investors continue tech sell-off

19 Jul 2024 - On Thursday, US stocks declined as investors continued to reduce positions in high-flying technology stocks and took profits from recent gains in other sectors.

Read More
27Mar

Deutsche Bank is the latest international bank to tumble

27 Mar 2023 - Stocks rose Friday after a volatile trading session. Although Friday began with fears that the banking crisis was spilling over to Deutsche Bank, the markets rebounded to end the week on a higher note.

Read More
17May

Red-hot inflation rise pressures Wall St to plunge: ASX to fall

13 May 2021 - The ASX is set to drop following Wall St closing deep in the red as the annual inflation rate rose to its highest in 13 years. Citi rates Suncorp (ASX:SUN) as neutral while Morgan Stanley rates Virgin Money UK (ASX:VUK) as hold. The SPI futures are pointing to a 0.4% fall.

Read More
08Apr

Some states could lift coronavirus restrictions sooner than others: ASX poised to open lower

08 Apr 2020 - Following weak leads from US markets, the ASX looks set to open lower this morning. Britain and New York state have reported their worst daily death tolls since the coronavirus pandemic began. Back home, Prime Minister Scott Morrison says Australia's economic recovery will begin with a be a series of "trials", with some states moving faster than others in lifting COVID-19 shutdown restrictions. Infratil (ASX:IFT) reports that the Longroad Energy has the closed the financing...

Read More
24Aug

Lithium boom outperforming weaker equity markets

24 Aug 2022 - Lithium stocks performed stronger overnight relative to weaker equity markets. If the results of Australian based Pilbara Minerals is anything to go by, then 2021-22 is shaping up to be the year when the long talked about lithium boom has became very real and very profitable.

Read More
19Mar

Australia’s population grows by 1.5%: ASX 0.5% higher at noon

19 Mar 2020 - The ASX rose at the open and is now tracking 0.5% lower at noon. Travel companies are being hit hard with Flight Centre Travel Group (ASX:FLT) and Corporate Travel Management (ASX:CTD) seeing their shares fall. Credit Corp (ASX:CCP) shares saw a huge drop of almost 35 per cent. Gains were seen this morning in Rio Tinto (ASX:RIO) despite an earthquake near its Kennecott mine near Salt Lake City, in Utah in the US. Harvey Norman...

Read More
28Apr

Government revenue exceeded expenses by $17m: Aus shares close 0.2% lower

28 Apr 2020 - The Australian share market rose slightly at the open but continued to slide closing 0.2 per cent down at the end of trade. The ABS has reported that the total Government revenue exceeded expenses by $17,300m.

Read More
07Sep

Major US indexes fall as Fed rate hike fears return

07 Sep 2023 - Stocks sold off Wednesday, continuing the sluggish start to September, as concerns mounted that the Federal Reserve may not be done hiking interest rates.

Read More