On Wednesday, a slew of US stock indices winded up the session in a negative territory after the US Federal Reserve had spilled out a swathe of pandemic-related uncertainties which could have long-lasting repurcussions on the economy, while investors’ reluctance to cash in on a raft of robust earnings’ reports with growth stocks failing to make an impression, added to further strains.
In factuality, following a two-day meet of US Fed policymakers, the US Federal Reserve had kept its benchmark interest rate unchanged between 0.00 per cent to 0.25 per cent and had pledged to continue its monthly bond repurchase program without offering any sign that the US Central Bank was prepared to downsize its support for a booming US economy.
Fanning up the flames further, US Fed Chair Jerome Powell was quoted saying in post-FOMC remarks that the Federal Reserve would continue its dovish stance until “substantial further progress” towards its inflation target of 2 per cent alongside an improvement in employment goals.
Besides, Powell had also added that any kind of talk to taper off fiscal support to the US economy would sound highly pre-mature at this standpoint, adding holocausts into the market participants’ morale. Meanwhile, citing that the Fed statement had highlighted a number of uncertainties yet to be addressed, a head of fixed income strategy at WisdomTree Funds, Kevin Flanagan said, “The Fed underscored a lot of uncertainty remains.
In this kind of a backdrop, with inflation being transitory, they’ll continue to be pedal to the metal in terms of monetary policy”.
Wall St. drowns after dovish Fed statement, Powell remarks
Concomitantly, although Google parent Alphabet Inc.
surged 2.9 per cent to hit its highest level on record and Facebook climbed over 6 per cent after its quarterly revenues had insanely beaten Wall St. estimates, Microsoft Corp. fell 2.8 per cent despite a relatively upbeat earnings’ report over frets of overvaluation, while Boeing Co.
dropped 2.9 per cent and US pharmaceutical giant Amgen Inc. shrugged off 7.2 per cent after missing quarterly profit estimates. Citing statistics, in the day’s Wall St. closing bell, trade-sensitive Dow dwindled 0.48 per cent to 33,820.38 and benchmark S&P 500 shed 0.08 per cent to 4,183.18, while tech-heavy Nasdaq was nudged 0.28 per cent lower to 14,051.03.