NEW YORK (dpa-AFX) – The prospect of key interest rates remaining high for the time being upset market participants on the US stock exchanges on Wednesday. The best-known Wall Street index, the Dow Jones Industrial (Dow Jones 30 Industrial), which had risen to a record just under 38,600 points at the start of trading, closed weakly. The S&P 500 and the technology-heavy Nasdaq stock exchange (NASDAQ 100) extended their losses and closed trading at intraday lows. They had already been burdened by losses in the shares of Alphabet, Microsoft and AMD as well as numerous other tech stocks.
After the interest rate decision, which was as expected, the President of the US Federal Reserve, Jerome Powell, said that a cut in March was unlikely. However, we have to wait and see, he said. While the stock markets then fell, the US dollar rose compared to the euro. Meanwhile, government bonds rose, but for other reasons. The U.S. Treasury increased the size of its quarterly issuance of longer-term debt for the third consecutive day, but indicated that no further increases would be expected until next year.
The Dow ended the day with a loss of 0.82 percent to 38,150.30 points. This results in an increase of 1.2 percent for the end of January. The market-wide S&P 500 lost 1.61 percent to 4,845.65 points and the Nasdaq 100 index lost 1.94 percent to 17,137.24 points on Wednesday. For both, this means an increase in January of just under two percent each. Last year, the technology-heavy Nasdaq selection index in particular performed far better than the Dow.
While Boeing shares in particular supported the Dow with an increase of 5.3 percent, technology stocks were depressed at the other end. Boeing benefited from the fact that the final quarter of 2023 was not as bad as feared. However, the aircraft manufacturer did not yet dare to look ahead to 2024.
Apple (Apple), IBM, Salesforce, Microsoft and Cisco were the biggest tech losers in the Dow, with losses between 1.9 and 3.9 percent, with the main interest being software giant Microsoft. He had announced his quarterly figures the evening before, as had Alphabet and AMD (AMD (Advanced Micro Devices)).
According to analysts, Microsoft’s quarterly business was “solid”, but high burdens caused by the integration of the game developer Activision Blizzard and growing investments in the cloud and AI infrastructure were not well received by all investors given the high valuation level of the share. The paper was unable to maintain the record high reached at the start of trading and lost 2.7 percent.
On the Nasdaq and the S&P 500, Alphabet’s A shares (Alphabet A (ex Google)) and C shares (Alphabet C (ex Google)) were the biggest losers, each down a good seven percent. The Google (Alphabet C (ex Google)) parent was unable to keep up with high expectations in the last quarter, despite renewed strong growth in the advertising business. AMD shares fell by 2.5 percent because the chip manufacturer disappointed with its outlook.
Among the smaller stocks, the shares of New York Community Bancorp and Rockwell Automation in particular caused bitter disappointments. Both missed expectations with their quarterly results, with the regional bank also surprising with a loss in the final quarter of 2023 and now wants to cut the dividend. The automation group’s shares fell by 17.6 percent. NY Community Bancorp, which had temporarily dropped 45 percent, lost almost 38 percent.
The fact that media mogul and major shareholder Byron Allen wants to take over Paramount Global completely, according to circles, gave the media group’s shares a recent gain of 6.7 percent. Apparently he wants to put a total of 14.3 billion dollars on the table.
After some ups and downs, the euro ultimately gave way and was trading at $1.0811 at the close on Wall Street. The European Central Bank had previously set the reference rate in Frankfurt at 1.0837 (Tuesday: 1.0846) dollars. The dollar therefore cost 0.9228 (0.9219) euros.
On the US bond market, the futures contract for ten-year government bonds (T-Note Future) recently rose by 0.83 percent to 112.55 points. In return, the yield fell to 3.92 percent./ck/he
— By Claudia Müller, dpa-AFX —