All three major U.S. stock indexes closed the session in the red, with the tech shares dragging the Nasdaq down 1.15%
U.S. stocks closed lower on Wednesday as crude prices dropped and investors weighed cautious U.S. Fed commentary and ongoing geopolitical strife against mixed quarterly earnings.
Benchmark U.S. Treasury yields and the dollar dropped from multi-month peaks, while gold declined from its all-time high.
All three major U.S. stock indexes closed the session in the red, with the tech shares dragging the Nasdaq down 1.15%.
April has been a little disappointing for investors, but remember stocks have gained over the past five months, some kind of pause or break would be perfectly normal, and we very well could be seeing that right now, said Ryan Detrick, chief market strategist at Carson Group.
U.S. Fed Chair Jerome Powell declined to provide guidance on Tuesday regarding the timing and extent of expected interest rate cuts, but said policy needs to be restrictive for longer, dimming hopes for rate cuts this year.
The realisation that Powell is pushing back on when the interest rate cuts might start has added to the overall confusion, solidifying the assumption that ‘higher for longer’ is likely the play, Detrick said.
But Jay Hatfield, Chief Executive Officer and portfolio manager at InfraCap in New York, said investors are now “overly pessimistic” with respect to central bank policy easing, saying that by June the Federal Reserve will be ready for a cut.
Hatfield said: Until then, we expect range-bound trading as we are seeing on Wednesday where there’s a push-pull between interest rates versus a strong economy and strong earnings.
The Dow Jones Industrial Average dropped 45.66 points, or 0.12%, to 37,753.31, the S&P 500 shed 29.2 points, or 0.58%, to 5,022.21 and the Nasdaq Composite slid 181.88 points, or 1.15%, to 15,683.37.
European shares followed a bruising sell-off with a marginal gain, supported by solid earnings from consumer firms, while investors kept a wary eye on developments in the Middle East.
The pan-European STOXX 600 index added 0.06% and MSCI’s gauge of stocks across the globe slipped 0.34%.
Emerging market stocks advanced 0.36%. MSCI’s broadest index of Asia-Pacific shares outside Japan ended 0.38% higher, while Japan’s Nikkei shed 1.32%.
