Stocks Fall In Volatile Session As Fed Hikes by 0.75%
3:02 pm Wednesday, November 02nd, 2022
The S&P 500 fell on Wednesday in wild action as traders tried to interpret the Federal Reserve’s next move after it delivered another widely expected three-quarter point interest rate hike.
The Fed unanimously voted to raise the target range on the federal funds rate by 75 bps to 3.75% to 4.00%, while adding the caveat that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
Other key excerpts from the FOMC statement included that job gains have been robust in recent months, and the unemployment rate has remained low. Additionally, inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.
The market received some economic data today that did not support this belief. The ADP Employment Change Report for October showed 239,000 jobs were added to private-sector payrolls, which followed the stronger-than-expected JOLTS number yesterday, indicating the labor market remains strong and wage-based inflation is likely to continue.
On an individual basis, there are companies enjoying sizable gains today after reporting favorable quarterly results and/or guidance. Advanced Micro Devices (AMD), CVS. Corp (CVS), and Caesars Entertainment (CZR) are among the winning standouts today for the earnings reporters.
The Treasury market has lacked conviction ahead of the FOMC decision. The 10-yr note yield is down one basis point to 4.04% and the 2-yr note yield is up two basis points to 4.55%.
