U.S. stocks were mixed on Wednesday as investors took in various economic data and minutes from the Federal Reserve's December policy meeting.
The S&P 500 ( ^GSPC ) edged up 0.1% in the afternoon to more than 1% off its session high as it rose for more minutes than expected. The Dow Jones Industrial Average (^DJI) fell 0.2% and the Nasdaq High Tech Composite (^IXIC) was little changed.
Reading the discussions at the December meeting of the US central bank, Fed officials warned that an "unwarranted" easing of financial conditions could undermine efforts to restore price stability, and acknowledged the need greater political flexibility.
"Participants noted that because monetary policy was conducted through financial markets, undue easing of financial conditions, particularly if the committee's response function was affected by a lack of public understanding, would complicate the efforts of the committee to restore price stability." the minutes of the meeting say… This was said at the Fed meeting on December 13-14.
Policymakers are due to meet again from Jan. 31 to Feb. 1 and will announce the first rate hike in 2023 and the eighth in the current growth cycle once talks are over. Last month, the Fed raised its key rates by 50 basis points, bringing the rate hike to 4.25% in 2022.
"The Fed minutes remind investors that interest rates will remain high through 2023," Mike Loungart, head of model portfolio construction at Morgan Stanley's global investment office, said in a comment sent by email. “As a result, although we have changed the schedule, the market headwind from last year has remained.
Earlier, the Labor and Employment Survey, or JOLTS, showed that 10.5 million jobs were added in November, more than expected, indicating continued strength in the labor market despite monetary tightening from the Federal Reserve. Meanwhile, the ISM manufacturing PMI fell for the second straight month to 48.4 in December from 49 in November, the biggest drop since May 2020.
Wednesday's decisions follow a rocky start to the 2023 talks as many pressures from the past year continue to weigh on investors in the new year. All three major indexes fell on Tuesday.
Meanwhile, shares of Microsoft (MSFT) fell 4.9% to their lowest level since November after UBS downgraded the stock from Buy to Neutral and lowered its price target to $50-250. $ due to concerns about company operations, cloud computing. key revenue generator
Tesla (TSLA) was back in the spotlight on Wednesday as shares fell 12% on the first trading day of 2023 on Tuesday. It was Tesla's biggest decline in more than two years and erased all rally gains made in the last three sessions of 2022 last week. Shares rose 4.5% on Wednesday.
The electric carmaker announced fourth-quarter vehicle production and delivery figures that disappointed Wall Street earlier this week, another setback for investors in Tesla's China manufacturing plant and the Twitter feed of the CEO Elon Musk.
Shares of Alibaba Group (BABA) rose 11.7% after billionaire founder Jack Ma received approval from Chinese regulators to raise 10.5 billion yuan ($1.5 billion) in credit to consumption for the Ant Group subsidiary. Other US-listed Chinese stocks also rose.
Salesforce (CRM) on Wednesday announced restructuring plans to cut about 10% of its workforce and close some offices, joining a growing list of tech companies laying off workers in 2021 due to the post-pandemic boom. It increased by 3.3%.
Elsewhere, US Treasury yields fell, with the benchmark 10-year bond falling 7 basis points to around 3.70% and the 2-year yield down around 4 basis points to 4.37% .
The US dollar index also fell. And oil prices continued to fall. West Texas Intermediate (WTI) crude, the US benchmark, fell 4% to below $74 a barrel.
© Provided by Yahoo Finance USA NEW YORK – JANUARY 03: View of the New York Stock Exchange on Wall Street during the first day of trading of 2023 at NYSE on January 3, 2023 in New York City. (Photo by Kena Betancourt/VIEW) Click)
Investors expect a busy week of economic data in the shortened first trading week of the year. Minutes from the December FOMC meeting will be released at 2:00 p.m. The reading likely reflects the mindset behind the central bank's 'slower but higher' regime, after Fed Chairman Powell indicated last month that he and his colleagues would switch to a modest rate hike , but probably at a higher terminal rate.
Financial markets ended Friday with their worst year since 2008 as central bank attacks on inflation and war in Eastern Europe hit stocks and bonds. As investors look back to 2022, much of Wall Street expects more challenges.
“What we got from our simulations is that there is a slight regime shift below the surface, which means that 2022 is about the Fed tightening monetary conditions to fight inflation,” he said. said Quant Insight's director of analysis, Hugh Roberts. He told Yahoo Finance Live on Tuesday.
"But what we're getting now is greater sensitivity to the real economy – greater sensitivity to growth, inflation expectations, industrial metals and the credit cycle – which suggests to us that the markets will prepare for a hard landing in early 2023."
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Alexandra Semyonova, Yahoo financial journalist. Follow her on Twitter @alexandraandnyc
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