S&P 500 posts biggest plunge since May after Fed rate cut, Powell comments


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S&P 500 posts biggest plunge since May after Fed rate cut, Powell comments

On Wednesday, the 31st of July 2019, all three indexes of Wall St. witnessed a merciless evisceration of more than 1 percent, reporting S&P 500's biggest intra-day drop since May 31st after Federal Reserve had axed interest rate for the first time in a decade, however, remarks made by Fed Chair Jerome Powell following two-day long meet of Fed policymakers had darkened outlook of further rate-cut.

Aside from that, while financial markets were expecting much-bigger monetary stimulus and policy easing such as at least a 50-basis point rate cut or initiation of an aggressive cycle of rate-cut, investors’ optimism turned a tail and there had been a flight-to-safety response on Wednesday’s (July 31st) Wall St.

However, an upbeat quarterly earnings’ report of Apple Inc., released after yesterday’s (July 30th) market closure, had eased some of the losses of Wall St.’s tech index Nasdaq. In point of fact, following Wednesday’s (July 31st) 25-basis point rate cut decision that bitterly disappointed investors across the world, Powell repeated multiple times that Federal Reserve would monitor US economic data and act accordingly to expand United States’ 10-year long streak of economic expansion.

Meanwhile, Fed’s Powell reiterated optimism over a roughly 50-year-low US unemployment rate and a stronger labor market, which in turn wiped out some optimisms of another rate cut at the September’s Fed policy meeting.

Quoting statistics, on Wednesday’s (July 31st) market closure, Dow dwindled 1.24 percent to 26,861.76, S&P 500 shed 1.10 percent to 2,980.11, while Nasdaq shrugged off 1.19 percent of its earlier gains to wind down Wednesday’s (July 31st) market at 8,175.42.