Fed Rate Hike, Central Bank Meetings, and Earnings Reports in Focus Ahead of U.S. Jobs Report
The U.S. Federal Reserve is widely expected to raise interest rates by a quarter of a percentage point on Wednesday, marking the second consecutive session of slowing rate hikes. However, traders are more focused on the tone of the officials during the meeting and the implications for future meetings. Jerome Powell, current Fed Chair, has pushed back against traders who anticipate rate cuts later this year, emphasizing that he won’t budge until inflation has eased meaningfully.
Stocks have rallied in January, with investors seemingly ignoring Powell’s “higher-for-longer” warning. The consensus is that the Fed will hike rates by 0.25%, but investors will be closely watching the commentary to assess when the central bank intends to stop hiking rates.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all fell on Monday morning. The S&P 500 lost 0.8%, the Dow Industrial Average 0.4%, and the Nasdaq Composite 1.17%. The yield on the 10-year Treasury rose 3 basis points to 3.49%.
CoinMarketCap reported that Bitcoin (BTC-USD) has dropped 1% in the cryptocurrency market, settling at $23,168 over the past 24 hours. Ford Motor (F) shares fell 1.9% after the automaker said it was cutting prices and ramping up production on its electric Mustang Mach-E crossover, following a similar announcement from Tesla. SoFi Technologies (SOFI) shares rose 13% after the digital financial services company posted an upbeat earnings guidance for the year ahead.
Looking ahead, investors are closely watching the U.S. jobs report later this week, as well as a flurry of heavyweight earnings reports and central bank meetings. The S&P 500 is on track to have its second-highest January performance since the year 2000, second only to its 7.9% increase in 2019.
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