With the Fed decision now in the rearview mirror, sentiment appears to have taken a turn for the better on the hopes of receiving strong earnings reports from some high-profile tech companies such as Meta Platforms, Inc. (NASDAQ:META), Amazon, Inc. (NASDAQ:AMZN) and Apple, Inc. (NASDAQ:AAPL). Given the Federal Reserve’s data-dependent stance, a couple of manufacturing activity data and the routine jobless claims data due for the day could draw traders’ attention.
Cues From Wednesday’s Trading:
U.S. stocks fell on Wednesday, stung by the double-whammy of earnings disappointments and a hawkish Fed. Traders reacted negatively to earnings from Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Microsoft Corp. (NASDAQ:MSFT), and Advanced Micro Devices, Inc. (NASDAQ:AMD), all of which have significant weightings in the S&P 500 Index.
The major indices started the session lower and moved roughly sideways until the Fed decision. The Dow was seen moving in and out of the unchanged line as it received support from a strong upward move in Boeing Co.’s (NYSE:BA) shares. The Nasdaq Composite and the S&P 500 indices languished in negative territory.
Following the rate decision, the indices either moved above the flat line or trimmed their losses. Jerome Powell disappointed traders by offering no clear signal toward a rate-cut schedule, so they dumped stocks in late afternoon trading.
The S&P 500 Index pulled further away from its record close, with the broader gauge and the Nasdaq Composite settling at the lowest levels in about two weeks.
The market witnessed a broad-based sell-off, with communications stocks being the worst hit. IT, consumer discretionary, and energy stocks also saw marked weakness.
US Index Performance On Wednesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -2.23% | 15,164.01 |
| S&P 500 Index | -1.61% | 4,845.65 |
| Dow Industrials | -0.82% | 38,150.30 |
| Russell 2000 | -2.45% | 1,947.34 |
For January, the Nasdaq Composite, S&P 500, and Dow have gained 1.02%, 1.59%, and 1.22%, respectively, while the R2K has slipped 3.93%.
Analyst Color:
Fund Strat pointed to “January barometer” that offers hope of sustained uptrend in the market this year. If the annual return of the prior year is over 15% and January is positive, then the probability of…
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