Stocks drop after Powell-fueled rally
US stocks slid on Wednesday morning as another set of earnings results hit traders’ desks, while enthusiasm from the previous session for Federal Reserve Chairman Jerome Powell’s acceptance “reducing inflation” has faded.
The S&P 500 Index (^GSPC) fell 0.4%, while the Dow Jones Industrial Average (^DJI) decreased by about 120 points, or about 0.4%. The tech-heavy Nasdaq Composite (^IXIC) decreased by 0.6%.
In specific stock moves, Microsoft (MSFT) shares were up 2.7% at the open, based on Tuesday’s 4% gain versus enthusiasm for a new version of its Bing search engine runs on a more powerful version of the popular OpenAI ChatGPT natural language AI technology.
Under armour (United States) was little changed at the open, reducing pre-market gains to 3% after the sportswear retailer raised earnings forecast on Wednesday morningBenefit from discounts during the holiday season.
by Uber (UBER) shares rose 6.3% after earnings for the last three months of 2022 beat expectations and Chief Executive Officer Dara Khosrowshahi said the company is growing.focus on achieving profit in 2023 when ride-hailing demand recovers from the pandemic.
Shares of Chipotle (CMG) fell 4% during opening hours after disappointing burrito maker earnings as higher costs for tortillas, milk, beans and rice, as well as labor costs, have hit profits.
CVS Health (curriculum vitae) shares rose nearly 4% in extended trading after the drugstore chain announced its agreement buy Oak Street Health for $10.6 billionmarks the second-biggest acquisition in healthcare in the past two years.
Wednesday morning’s moves come after investors cheer Comment from Powell at a lecture in Washington, DC, in which he accepted the presence of “de-inflation” in the US economy. On Tuesday, the S&P 500 rose 1.3%, the Dow 0.7% and Nasdaq 1.9%.
DataTrek’s Nicholas Colas noted that Powell’s comments did not affect market expectations about the likely path of monetary policy this year. Colas pointed out that yield-sensitive two-year Treasury yields were unchanged after the speech – at 4.46% while federal funds futures were at 4.50-4.75 % – suggests that policy rates over the next 24 months could stay the same.
“[Yesterday] “The stock market rally in the afternoon shows markets like a slow and steady approach to monetary policy, focused on upcoming data from Powell,” Colas said. “
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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