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Indexes fell on Thursday as traders focused on comments from Fed Chairman Jerome Powell.
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Powell said the Fed is in no rush to cut rates and reiterated the strength of the U.S. economy.
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Traders also digested wholesale inflation data, which was in line with expectations.
Indexes closed lower on Thursday as the election rally culminated as traders digested comments from Federal Reserve Chairman Jerome Powell and assessed the latest inflation data.
The S&P 500 and Nasdaq fell more than 0.5%, while the Dow Jones Industrial Average lost more than 200 points. Ten-year government bond yields, meanwhile, remained virtually flat at 4.447%, hovering close to their highest level since July.
Here’s where the US indexes stood at 4pm on Thursday:
The decline comes after Powell indicated that the Fed is in no hurry to cut rates as long as the US economy remains on solid footing.
“The economy is not signaling that we need to rush to lower interest rates,” Powell said during prepared remarks at an event in Dallas. “The strength we see in the economy right now gives us the opportunity to approach our decisions carefully.”
Powell added that the US has had the best domestic growth of any major economy, and highlighted the strength of the labor market. He said slowing job growth in the October jobs report was largely due to storm-related damage.
Powell’s comments come as investors look for hints about the Fed’s intended easing path after a 25 basis point cut last week. Trump’s election victory has raised concerns that inflation could rise again due to his proposals for broad tariffs and mass deportations, which could prompt the Fed to halt interest rate hikes, economists say.
Traders expect the central bank to cut another 25 basis points at its December meeting before taking a break in January, CME’s FedWatch tool shows.
Powell’s comments also follow the latest inflation figures, which show wholesale prices rose 0.2% in October, according to data from the Bureau of Labor Statistics.
The data was in line with expectations, but showed inflation remaining somewhat stable, with an annual increase of 2.4%.
The core producer price index, which excludes food and energy prices, rose 0.3% this month and 3.1% year-on-year.
Meanwhile, unemployment claims data on Thursday showed weekly claims fell to the lowest level since May, to 217,000 last week. That means a decrease of 4,000 compared to the week before.
Here’s what else is going on:
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Investors underestimate how deep interest rate cuts will be in 2025, says Goldman Sachs.
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EV makers are up in arms over the report that Trump wants to scrap the EV tax credit.
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Disney shares rose as the rare three-year forecast calls for strong earnings growth.
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The weak Chinese economy and record US production will lead to a surplus of one million barrels of oil per day next year, the IEA says.
In commodities, bonds and crypto:
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Oil futures rose. West Texas Intermediate crude rose 0.3% to $68.63 a barrel. Brent crude, the international benchmark, rose 0.3% to $72.48 per barrel.
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Gold rose 0.5% to $2,572 an ounce.
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The 10-year government bond remained virtually stable at 4.447%.
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Bitcoin fell 1.4% to $87,531.
Read the original article on Business Insider
