Sun, December 04, 2022

U.S. stocks and Federal Reserve

Stocks and Federal Reserve

On Wednesday, U.S. stocks benefited from the news that U.S. Federal Reserve is unlikely to change rates in 2020. As a reminder, last year, the Federal Reserve made a decision to tighten its monetary policy. This decision had a negative impact on the stock market.

Three major U.S. stock indexes strengthened their positions. The Dow Jones Industrial Average added 29.58 points or 0.1% to close at 27,911.30.

The S&P 500 increased by 0.3% to 3,141.63. Another major stock index, the Nasdaq Composite, gained 0.4% to 8,654.05.

United Technologies and Disney helped the Dow Jones index. The shares of each company increased by at least 1%. Cupertino-based tech giant Apple also contributed as its shares gained 0.9%.

Home Depot was the biggest Dow Jones loser, as shares of Home Depot fell by 1.8%. Disappointing sales-growth outlook affected this company.

The tech industry was the best-performing S&P 500 sector, rising 0.7% along with materials and industrials.

Federal Reserve and marketsStocks and central bank

On December 11, the U.S. Federal Reserve decided not to change the interest rates. It is worth mentioning that the Fed reduced the interest rates three times.

Moreover, the central bank indicated it is unlikely to changes its policies in 2020. Fed Chair Jerome Powell explained the Fed’s decision during a news conference. According to Powell, it depends on the inflation rate; if the inflation rises significantly, the bank may change its policy.

On the same day, data regarding the economy became available to the public. In November, U.S. jobs grew by 266,000. This result surpassed the expectations of Dow Jones. U.S. consumer prices also were higher than expected by the economists as prices increased by 0.3%.

Last but not least, news connected to the stock markets is connected with the trade war. Investors are closely monitoring the situation as the U.S. and China are trying to salvage the “phase one” deal.

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