Last Updated: 4:00PM EST
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Stock indices finished today’s trading session in the red as investors get ready for tomorrow’s interest rate decision from the Federal Reserve. The Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) fell 1.08%, 1.16%, and 0.89%, respectively.
Investors are pricing in an 85% chance of a rate hike tomorrow, which would bring the Fed Funds rate to a range of 5% to 5.25%. Interestingly, it seems like the market expects this to be the final increase as the futures market is implying an 85% and a 57% chance that rates will stay within this range in June and July, respectively, before they start coming down.
Furthermore, the U.S. 10-Year Treasury yield decreased to 3.43%. The Two-Year Treasury yield also decreased, as it hovers around 3.98%. This brings the spread between them to -55 basis points.
Last Updated: 2:15PM EST
Stocks remain under pressure in today’s trading session. As of 2:15 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 1.4%, 1.4%, and 0.9%, respectively.
On Tuesday, the U.S. Census Bureau released its Factory Orders report, which measures the change in the total value of new purchase orders placed with manufacturers. During March, factory orders increased by 0.9% on a month-over-month basis. However, this missed expectations of a 1.1% increase.
In addition, when excluding transportation, factory orders decreased by -0.7%, which was flat compared to the previous report.
Last Updated: 11:00AM EST
Stocks are in the red so far into today’s trading session as the Fed meeting begins. As of 11:00 a.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are down 1.6%, 1.6%, and 1.3%, respectively.
Furthermore, the Bureau of Labor Statistics released its JOLTs Job Openings report, which helps measure job vacancies in the U.S. The number came in at 9.590 million job openings for March, below the expected 9.775 million. This is lower than the previous report, which saw 9.974 million job openings, and marks the third consecutive month of declines. Furthermore, job openings have been in an overall decline since peaking at 11.855 million back in May 2022’s report.
It’s important to remember that this data is for March, thus, making it a lagging indicator. Since then, many companies have announced that they will reduce their workforce in order to cut costs, which provides evidence that this downward trend is likely to continue.
Last Updated: 9:50AM EST
U.S. stocks are mostly red on early trading Tuesday morning as markets anticipate the outcome of the two-day Fed policy meeting that commences today. The Nasdaq 100 (NDX) is down by 0.3%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are lower by 0.4% and 0.5%, respectively, at 9:50 a.m. EST, May 2.
The Federal Reserve will disclose the interest rate decision at the end of the Federal Open Market Committee (FOMC) meeting tomorrow. The trading momentum will build steadily as Fed Chair Jerome Powell takes the stand after the meeting ends.
At the same time, stronger-than-expected earnings from corporate America are taking traders by surprise. Yesterday, universal bank JPMorgan Chase (NYSE:JPM) jumped in to rescue failing lender First Republic Bank, showing resilience in the banking sector. The situation is very unlike the 2008 financial crisis, when both the larger and smaller banks were beaten down by the turmoil.
The most anticipated earnings this week are those of Apple (NASDAQ:AAPL), whose results are expected on May 4. Reporting today are ride-hailing service provider Uber (NYSE:UBER), vaccine maker Pfizer (NYSE:PFE), chip maker Advanced Micro Devices (NASDAQ:AMD), car maker Ford (NYSE:F), and coffee giant Starbucks (NASDAQ:SBUX).
On the economic front, traders will pay close attention to today’s factory order data and the JOLTS job opening data.
Elsewhere, most European indices opened on a positive note today after a three-day-long trading holiday. Markets are also awaiting the data on euro zone inflation figures scheduled for release today. Shares of BP Plc (NYSE:BP) are down over 4% in pre-market trading today after the oil major reported a profit of $4.96 billion, much lower than the comparative prior period figure of $6.2 billion.
Asia-Pacific Markets Mostly End Mixed
Asia-Pacific indices ended the trading session mixed today, as markets await the U.S. Fed’s monetary policy decision. In a surprise move, Australia’s central Bank raised interest rates by 25 basis points today, against expectations.
In the meantime, Chinese markets remained closed for trading today, extending the three-day trading weekend. Hong Kong’s Hang Seng index ended up by 0.20%.
At the same time, Japan’s Nikkei ended the day up by 0.12% while the Topix index ended down by 0.12%.
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