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Stocks mixed following latest Fed rate hike

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US stocks were mixed on Wednesday afternoon. Federal Reserve Announces Latest Rate HikeThis pushed the Fed’s benchmark policy rate to its highest level since October 2007.

In a statement, the Fed referred to inflationary pressures, but said inflation “remains elevated” as price pressures have proven to be persistent across the economy.

The central bank also hinted that Wednesday’s rate hike would not mean the end of its campaign, saying the Fed “will continue to push ahead with the continuation of the target range to achieve a monetary policy stance that is sufficiently restrictive to undo inflation.” We expect a substantial increase to be appropriate,” he said. 2 percent over time.

The statement added that the increase in futures “takes into account the cumulative tightening of monetary policy, the delay in how monetary policy affects economic activity and inflation, and economic and financial development.”

The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^ DJI) fell 0.7%. Technology-focused Nasdaq Composite (^IXIC) changed to a green number and increased by 0.2%.

On Tuesday, the S&P 500 posted its best January since 2019 and the Nasdaq 100 enjoyed its strongest January gain since 2001, rising more than 10% to cap off a strong start to the year.

Earnings season is still in full swing, Another disappointing quarter from Snap (snap) got the most investor attention last night.

The social media company’s share price fell more than 14% after its acquisition. told investors The company’s internal forecasts assume that revenue for the current quarter will be down 10% to 2% year over year.

match group (MTCHMore) and Electronic Arts (EAs) shares also fell by more than 9% and 12%, respectively, on Wednesday. After reporting a disappointing quarter Tuesday afternoon.

Peloton (PTON) shares rose more than 17% on Wednesday, down from $747 million nine months ago, after the company reported cash burn fell to $94 million in the latest quarter. On an adjusted basis, the company reported free cash flow of $8 million during the holiday quarter.

“If you’re wondering if Peloton will make a dramatic comeback, this quarter’s results show that the changes we’re making are working,” said CEO Barry McCarthy. increase. wrote in a letter to shareholders.

Wednesday’s Earnings Highlights: Meta Platforms (meta) releases its quarterly report.

In terms of economic data, New Data on Private Employment Growth Private employers added 106,000 jobs last month, according to an ADP survey, which is less than the 170,000 economists expected.

In its report, the ADP said weather had affected its labor market measurements, citing flooding in California and snowstorms in the central and eastern parts of the country during the reference week. increase.

“In January we saw the impact of weather-related disruptions on employment in the reference week,” said ADP chief economist Nella Richardson. The other weeks of the month were also strong.”

the data above Recruitment information for December Wednesday’s announcement suggested that demand for workers remained strong, with 11 million jobs available at the end of the month, up from 10.4 million at the end of November.

Elsewhere in the economic data, S&P Global and Institute for Supply Management measurements on the manufacturing sector point to continued weak activity in the first month of 2023.

ISM Latest Manufacturing PMI Readings fell to lowest level since May 2020Economists see it as another sign that recessionary pressures continue to build on the US economy.

In a note to clients Wednesday, Andrew Hunter, senior U.S. economist at Capital Economics, took a closer look at the ISM report and found that “weakness in the domestic economy is increasingly the main driver of the manufacturing sector’s woes. Overall, the ISM report supports our view that the U.S. economy is approaching recession.”

S&P Global’s reading showed Chris Williamson, chief business economist at S&P Global Market Intelligence, said the deterioration in the manufacturing sector was slightly slower in January than in December, but still “concerned about the health of the commodity production sector. It shows that it is declining as rapidly as possible.

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