By Chuck Mikolajczak
NEW YORK (Reuters) – A gauge of global stock prices fell on Wednesday, while the dollar fell against a basket of peers after the Federal Reserve left interest rates unchanged and said it was still leaning towards possible rate cuts and after a raft of U.S. economic data .
But the Fed sounded a red flag on recent disappointing inflation data, suggesting the move toward more equilibrium in the economy may stall.
The central bank also announced plans to slow the pace of balance sheet reduction, after warning of such a shift in the first part of the year.
Sam Stovall, chief investment strategist at CFRA Research in New York, said the Fed’s policy statement contained no major surprises.
“That thing is being gone through with a fine-tooth comb, and if there is any kind of response today, it will be as a result of the responses at the press conference,” he said.
He noted the release of employment data at the end of this week, which will be closely monitored. “But there are several things in my opinion that will hold the market back,” Stovall said. “One is the persistence of inflation, the actual inflation rates, the concern that we are seeing a slowdown in economic growth based on the recent GDP numbers, combined with PMI data, and that consumer confidence is becoming weaker than expected.”
On Wall Street, trading was slightly lower due to choppy trading in the wake of the Fed’s policy announcement, after each of the major indexes ended April with their first monthly declines since October.
Remove ads
.
Stocks rose 172.78 points, or 0.46%, to 37,986.53, the S&P 500 lost 3.66 points, or 0.07%, to 5,032.03, and gained 0.38 points, or 0. 00%, to 15,658.20.
Previously, data from ADP’s employment report showed that US private payrolls rose more than expected in April, while data for the previous month was revised upwards.
But a separate report from the Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey (JOLTS) shows that U.S. job openings fell to a three-year low in March, while the number of people leaving their jobs fell , which are indications of a loosening of the labor market. market conditions that could potentially help the Fed in its fight against inflation.
Other data from the Institute for Supply Management pointed to continued sluggishness in the U.S. manufacturing sector, which contracted in April amid a drop in orders after briefly expanding the previous month.
The data comes ahead of the government’s main employment report on Friday.
Markets have revised down expectations for the timing and size of central bank rate cuts this year as inflation has proven to be persistent and the labor market remains on solid footing.
The MSCI index for shares around the world fell 0.94 points, or 0.12%, to 755.67.
Investors also grappled with a flood of U.S. corporate earnings, with Amazon.com (NASDAQ:) up about 3% after its quarterly results, helping the Dow Jones rise.
The euro fell 0.21% to 106.10 after the Fed’s statement, having previously reached 106.49, its highest level since April 16, with the euro rising 0.22% to $1.0688.
Remove ads
.
The yield on US 10-year benchmark bonds fell 5.2 basis points to 4.632% from 4.684% late on Tuesday, while the yield, which typically moves in line with interest rate expectations, fell 4.8 basis points to 4.9977% .
European bond markets were closed for the May 1 holiday, as were most stock markets in Europe and those in China, Hong Kong and much of Asia.
Of the stock markets that traded, they ended 0.28% lower and closed 0.34% lower.
Oil prices fell for a third day on rising hopes for a ceasefire deal in the Middle East and continued declines following the US EIA stockpiling report.
lost 3.54% to $79.03 per barrel and fell to $83.49 per barrel, down 3.29% on the day.
