Matthew Fox
Andrew Kelly/Reuters US stocks finished lower on Tuesday as investors cast doubt on the Fed easing rate hikes.A strong November jobs report and solid GDP data suggests a resilient economy may keep the Fed hiking rates for longer.The S&P 500 extended its two-day decline to more than 3% as its 200-day moving average remains a big resistance level. Loading Something is loading.
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US stocks moved decidedly lower throughout the day on Tuesday, as investors continue to question whether the Federal Reserve’s upcoming interest rate hikes will actually ease in the face of resilient economic data.
The Fed is largely expected to hike interest rates by 50 basis points at its FOMC meeting next week, a step down from its four straight 75-basis-point interest rate hikes. Another 50-basis-point increase is expected at its February FOMC meeting, according to the CME’s FedWatch Tool.
Last week’s strong November jobs report and continued resilience in quarterly GDP data shows that the economy is holding up well despite the Fed’s near-400 basis points of interest rate hikes made so far this year. The Federal Reserve Bank of Atlanta’s GDPNow forecast sees 2.8% GDP growth in the fourth-quarter.
And while inflation is showing signs of slowing down, any unexpected acceleration in prices could spark a more hawkish Fed that remains steadfast in its tightening. The S&P 500 is down more than 3% since Friday, after testing its declining 200-day moving average as resistance.
Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday:
S&P 500: 3,941.24, down 1.44%Dow Jones Industrial Average: 33,596.08, down 1.03% (351.02)Nasdaq Composite: 11,014.89, down 2.00%Here’s what else happened today:
Bankrupt cryptocurrency lender Celsius has secured a judge’s approval for its plan to hand out bonuses worth up to $2.8 million to keep key staff from quitting.Charles Schwab’s chief strategist Liz Ann Sonders said that investors have overestimated the time it will take for the central bank to pivot to easing monetary policy in 2023.The global economy could be headed for crisis with policymakers powerless to prevent a toxic combination of high inflation, low growth, and mounting debt, economist Nouriel Roubini has warned.Tanker charter prices are sky-high for ships willing to transport Russian oil amid sweeping sanctions. Middle East and Asian buyers are opportunistically snapping up aging oil tankers to ship Russian fuel.JPMorgan CEO Jamie Dimon said he expects the Federal Reserve will hike interest rates to 5% and hold them there for several months, but warned even that may not be enough to tame inflation. He also likened cryptocurrencies to pet rocks.Shark Tank investor Kevin O’Leary said he’s getting his money back from FTX, and that the collapsed crypto exchange needs to be audited before Sam Bankman-Fried can be found guilty of any wrongdoing. In commodities, bonds and crypto:
West Texas Intermediate crude oil fell 3.37% to $74.34 per barrel. Brent crude, oil’s international benchmark, dropped 3.81% to $79.53.Gold rose 0.12% to $1,783.50 per ounce.The yield on the 10-year Treasury fell six basis points to 3.53%.Bitcoin fell 0.11% to $16,986, while ether dropped 0.71% to $1,253. Read next
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