U.S. Stocks Start Month in Red as Interest Rates Rise

U.S. stocks are starting the month of March in the red, as investors fear the prospect of higher and longer-term interest rates.[0] Data released on Monday revealed that durable goods orders had a steeper than expected decline of -4.5% month-over-month in January, yet core durable goods orders rose to +0.7% month-over-month, surpassing forecasts of +0.1% month-over-month.[1] The National Association of Realtors’ pending home sales index jumped 8.1% month over month, handily topping Wall Street’s expected 1% rise.[2]

The Dow Jones Industrial Average (^DJI) opened down 30 points, or 0.1%, to 32,620, according to FactSet data.[3] The S&P 500 (^GSPC) fell by 10 points, or 0.3%, to 3,960, while the Nasdaq Composite (^IXIC) shed 20 points, or 0.2%, to 11,433.[4] The Nasdaq Composite (^IXIC), which is heavily reliant on technology, experienced a 0.6% decrease in contracts[5]

The current range for the Federal Reserve’s benchmark interest rate is 4.50% to 4.75%, implying at least two more quarters of percentage point hikes starting in March. On Tuesday, Aditya Bhave, an economist at Bank of America, declared that the Federal Reserve may have to hike rates up to 6% in order to get inflation to around 2% annually. He predicted that the peak federal funds rate for this year would be much higher than what is currently being predicted by the market.

Data from S&P CoreLogic Case-Shiller Index showed that home prices fell 0.5% in December, lower than analysts’ expectations of 4.8%.[6] Consumer confidence in February fell to its lowest reading since November, pointing to signs strong consumer spending, which has underpinned strong growth so far this year, may be starting to slow.[7]

In single stock moves, Zoom (ZM) shares rose after the company posted better-than-expected fourth quarter earnings, with earnings per share of $1.22 higher than estimates of 80 cents.[1] The total revenue was $1.12 billion.[8] Prior to the market opening, shares of Seagen Inc (SGEN) rose by more than 12% after The Wall Street Journal reported that Pfizer Inc (PFE) is in the initial stages of negotiations to buy the biotechnology company.[9]

0. “Stock market news today: Fears of high interest rates hit investors” Markets Insider, 1 Mar. 2023, https://markets.businessinsider.com/news/stocks/stock-market-news-today-investors-fear-high-interest-rates-fed-2023-3

1. “Stocks Mixed Before The Open As Fed Fears Persist, Target Earnings On Tap” Barchart, 28 Feb. 2023, https://www.barchart.com/story/news/14619032/stocks-mixed-before-the-open-as-fed-fears-persist-target-earnings-on-tap

2. “Dow Jones Rallies 300 Points After Economic Data; Tesla Stock Surges On Production Ramp” Investor’s Business Daily, 27 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-climb-ahead-of-economic-data-tesla-stock-jumps-on-production-ramp/

3. “Stock Market News Today: Indices in the Red” msnNOW, 1 Mar. 2023, https://www.msn.com/en-us/money/markets/stock-market-news-today-indices-in-the-red/ar-AA184YmC

4. “U.S. stocks kick off March in the red as Dow falls to fresh 2023 lows” MarketWatch, 1 Mar. 2023, https://www.marketwatch.com/story/u-s-stocks-kick-off-march-in-the-red-as-dow-falls-to-fresh-2023-lows-301b1cd8

5. “Stock market news today: Stocks fall, manufacturing data on tap” Yahoo News, 1 Mar. 2023, https://news.yahoo.com/stock-market-news-live-updates-march-1-2023-124448484.html

6. “Stock Market Today: Stocks Wobble as February Draws to a Close” Kiplinger’s Personal Finance, 28 Feb. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-022823-stocks-wobble-as-february-draws-to-a-close

7. “Stock market today: Dow suffers monthly loss as Fed fears wound stocks in February By Investing.com” Investing.com, 28 Feb. 2023, https://www.investing.com/news/stock-market-news/stock-market-today-dow-suffers-monthly-loss-as-fed-fears-wound-stocks-in-february-3017564

8. “Stock market news today: Stocks fall as volatile month comes to close” Yahoo News, 28 Feb. 2023, https://news.yahoo.com/stock-market-news-live-updates-february-28-2023-120603661.html

9. “Stocks Set To Open Higher After Worst Week Of The Year, Retail Earnings In Focus” Barchart, 27 Feb. 2023, https://www.barchart.com/story/news/14581554/stocks-set-to-open-higher-after-worst-week-of-the-year-retail-earnings-in-focus