-
Stock indexes retreated as investors digested comments from Fed Chairman Jerome Powell on Thursday.
-
The chances of a 25 basis point rate cut in December fell sharply after Powell’s speech.
-
Bond yields also rose on the comments and amid signs of economic strength.
US stocks fell on Friday morning after Wall Street lowered interest rate cut expectations for December.
The taper began Thursday afternoon after Fed Chairman Jerome Powell indicated the central bank will take time to ease policy, citing continued U.S. economic strength.
“The economy is not sending any signals that we should rush to cut rates,” he said.
The probability of a 25 basis point rate cut fell to less than 60% shortly after Powell’s comments, down from 80% as calculated by the CME FedWatch Tool. On Friday morning the chance remained lower, around 58%.
A series of encouraging economic data is also influencing expectations about interest rate cuts. New figures on Friday showed U.S. retail sales rose in October, boosted by a jump in auto purchases.
While the three major indexes faced their first losing week since the election, bond yields rose. Two-year yields – the most sensitive to short-term interest rate forecasts – have risen 7 basis points in the past two days.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:
Here’s what else is going on:
In commodities, bonds and crypto:
-
The oil markets fell. West Texas Intermediate crude fell 0.96% to $68.04 per barrel. Brent crude, the international benchmark, fell 0.94% to $71.88 per barrel.
-
Gold was essentially flat at $2,572 an ounce.
-
The 10-year government bond rose by 4 basis points to 4.459%.
-
Bitcoin rose 2.28% to $90,053.
Read the original article on Business Insider
