Financial stocks pulled down US stocks after the FED meeting
Two S&P 500 and Dow Jones indexes of the US stock market fell in the trading session on Wednesday, when the group of financial stocks sensitive to interest rates put pressure on the indices. Many financial “stocks” simultaneously fell after the US Federal Reserve (FED) ended the meeting by reaffirming its stance on soft monetary policy.
Although there were times when all three indexes tried to “green” after the Fed’s announcement was made, only the Nasdaq ended up in a rising state, Reuters news agency said.
“The first reaction to a Fed statement is always a false reaction,” said Art Hogan, chief strategist at National Securities. He said that the results of the FED meeting are making the market wonder: the soft Fed has the effect of supporting the market, but the rising interest rates also put down pressure on financial stocks.
After a two-day meeting, the world’s most powerful central bank signaled not to raise interest rates this year, and provided a detailed plan for ending the quantitative tightening program (QT). . This is a monthly program to sell assets to reduce the size of the FED’s balance sheet.
Sold off at the last hour of the session, financial stocks closed at 2.1%.
Traders said that bank stocks were sold especially strongly because the yield curve became flat.
US stocks have been in an uptrend since the beginning of the year, after FED Chairman John Powell announced that FED would apply a “cautious” approach to monetary policy. During the press conference on March 20, Powell reaffirmed this position, based on conflicting economic data, as well as risks from Brexit and US-China trade negotiations.
Even many future funds in the US are now seeing the possibility that FED will cut interest rates on oil in 2020.
At the close, Dow Jones fell 0.55%, to 25,745.67 points. S&P 500 dropped 0.29% to 2,824.23 points. Nasdaq increased 0.07%, reaching 7,728.97 points.
Among 11 major stocks of S&P 500, 6 groups closed in a down state.
FedEx shares fell 3.5% after the international freight forwarder cut its 2019 profit forecast on account of slowing global trade growth.
General Mills shares rose 2.2% after the packaged food company reported a higher-than-expected profit and raised its profit forecast for the year.
On the NYSE, the number of losers was 1.16 times higher than the number of gainers. On Nasdaq, the corresponding rate was 1.64 times.
There were 7.76 billion shares transferred on Wall Street this session, compared with the average of 7.53 billion shares per session of the last 20 trading days.Tags: Dow Jones, FedEx, financial stocks