Stocks close lower after Fed chief Powell plays down chances of easier monetary policy

US stocks fell back to close on Wednesday after Federal Reserve Chairman Jerome Powell acknowledged a slowdown in corporate and household spending, but described low inflation as "transitory" and denied there was a " solid case "to expect a cut in the interest rate in the short term.

How did the main indexes perform?

The Dow Jones Industrial Average

DJIA, -0.61%

fell 162.77 points to 26,430.14, a loss of 0.6%, while the S & P 500 index

SPX, -0.75%

it fell 22.10 points, or 0.8%, to 2,923.73. Meanwhile, the Nasdaq Composite Index

COMP, -0.57%

They fell 45.75 points, a loss of 0.6%, to 8,049.64.

Although the S & P 500 index also set a new intraday high early Wednesday at 2,954.10, the index ended its worst daily performance in more than a month. The Nasdaq rose 50.61 points to 8,146 at session highs, while the Dow rose as much as 96.48 points to reach 26,689.39.

On Tuesday and Wednesday, it marked the first slide of two sessions for the Nasdaq from March 22 and 25, while the Dow had its worst day since April 9.

What has driven the market?

After briefly resuming the announcement of the Fed's decision to leave the reference rate of federal funds in a range between 2.25% and 2.5%, the shares declined significantly during and after the press conference of Powell.

While the Fed statement highlighted data showing that the price inflation rate has fallen and remains below the central bank's 2% target, Powell emphasized that "there is no solid case" to expect the next move of the central bank will be a rate cut, investors The futures market of federal funds has predicted. According to the CME Group, the futures markets of federal funds show a probability of 59.8% that the Fed will reduce interest rates before the end of the year.

Live blog summary: Powell addresses reporters after the Fed keeps rates unchanged

Apple component Dow

AAPL, + 4.91%

it was the center of attention after the iPhone maker reported another drop in earnings and revenue, but exceeded expectations for performance in the first quarter. In addition, Apple said the worst had already happened for its business in China, and reported a boost in its services business, which bulls consider key to the company's growth. The shares rose 4.9%.

First shot: Apple is optimistic, and it's not about the iPhone

What actions were in focus?

Actions of CVS Health Corp.

CVS, + 5.42%

it recovered 5.4% after the pharmacy and health services giant reported first quarter earnings and sales that exceeded Wall Street expectations, while raising its outlook for 2019.

Estée Lauder Cos. Inc.

The -0.88%

shares fell 0.9%, reversing morning earnings to 4.9%, after the makeup manufacturer reported first quarter sales that exceeded badysts' expectations, while the revenue forecast would grow between 7% and 8% throughout the year 2019.

Molson Coors Brewing Co.

TAP, -7.54%

fell 7.5% after the company reported first-quarter earnings that missed forecasts.

Actions of Humana Inc.

HUM, -3.62%

it fell by 3.6%, even after the insurer reported first-quarter earnings and revenues on Wednesday morning that exceeded Wall Street's expectations, while raising its guidance for the entire year.

Yum! Trademarks inc

Mmm -2.35%

shares fell 2.4% on Wednesday, after the Taco Bell parent reported the results of the first quarter.

Actions of Royal Caribbean Cruises Ltd.

RCL, + 6.69%

rose 6.7% on Wednesday, after the cruise operator reported earnings, revenues and first quarter net income that exceeded expectations.

Hotel operator Hilton Worldwide Holdings Inc.

HLT, + 6.45%

First-quarter earnings growth of 16% was announced on Wednesday, well above Wall Street forecasts. Share increased by 6.5%.

Group of chips Qualcomm Inc.

QCOM, + 0.28%

social player Zynga Inc.

ZNGA, -2.65%

wearables manufacturer FitBit Inc.


and mobile payment group Square Inc.

SQ, + 1.10%

They were scheduled to report on Wednesday night.

Read: Qualcomm's short sellers are in full force before profits

Check out: Earnings from Qualcomm, schmernings: tell us more about the Apple agreement

What do badysts say?

"The characteristic of this meeting for investors is the Fed's economic outlook, which highlights the" sustained expansion of economic activity "balanced with a smooth global economic outlook and" inflationary inflationary pressures, "Jason wrote. Pride, director of private wealth investments at Glenmede., In the comments sent by email.

"With the US economy at or near full employment, the expectation of future changes in rates will essentially be a referendum on inflation, which has usually remained below the Federal Reserve's 2% target in this cycle. ", He said.

Chris Gaffney, president of the global markets division at TIAA Bank, made the reaction of the badsaw market through the badets an initial overreaction to the modification of the Fed to IOER (interest on excess reserves), which decreased

"Investors took this move as an indicator that the next move in the interest rate will be a cut in the federal funds rate. "This is what drove the dollar lower and also caused a fall in interest rates on all maturities of the US Treasury curve," Gaffney wrote in an email.

"Powell reiterated twice during the question and answer session that this move in the IOER was not an indication of a future policy, but a technical adjustment," he added. "The markets changed course following Powell's explanation of movement."

What else was in the economic calendar?

The payroll firm ADP published its estimate of employment growth in the private sector in April, showing that the economy of the US. UU It added 275,000 new jobs, well above the 176,000 consensus estimates, according to FactSet. However, Mark Zandi, chief economist at Moody & # 39; s Analytics and architect of the ADP report, said the figure "exaggerates the case" for job growth and predicted that the government's official jobs report on Friday will show growth. of less solid employment.

The Markit Manufacturing Purchasing Managers Index for April stood at 52.6, a slight rebound from the almost two-year low seen last month, and exceeded consensus expectations for a reading of 52.4, according to FactSet data.

The manufacturing index of the Institute for Supply Management, which was observed most closely, stood at 52.8%, well below consensus expectations of 54.7%, according to a MarketWatch survey among economists, and below the reading of March of 55.3%.

The Commerce Department said construction spending fell 0.9% in March, compared to February, below economists' expectations of a 0.4% decline, according to a MarketWatch survey.

How did it go to other markets?

Most of the Asian stock markets were closed for holidays, although the S & P / ASX 200 of Australia

XJO, + 0.80%

closed with an increase of 0.8%, while the NZK-50 of New Zealand

NZ50GR, -0.47%

It fell 0.5%. The European stock markets also closed to a large extent for the May Day celebrations, while the US FTSE 100 closed.

UKX, -0.44%

closed 0.4% less.

The price of crude oil.

CLM9, -0.55%

It went down on Wednesday, along with gold prices.

GCM9, -0.62%

The U.S. dollar.

DXY, + 0.17%

He was moving forward, in relation to his companions.

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