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Home » The Dow Jones is headed for its fourth day of declines by Powell

The Dow Jones is headed for its fourth day of declines by Powell

The DOW JONES falls 0.15% to 33,900 points, while the S&P 500 falls 0.27% to 4,354 points. The NASDAQ 100 returns 0.33% at 13,459 points.

Wall Street had a difficult session yesterday. The S&P 500 fell 0.5%, marking its worst day since early June. The benchmark index is down 1% so far this week and is on track to break its five-week winning streak. which pushed the index to highs for the year. The technology index Nasdaq Composite fell 1.2%, posting its worst daily result since June 7, while the Dow Jones fell 0.3%.

The falls came after that Federal Reserve Chairman Jerome Powell said yesterday that more rate hikes are likely to come to fight inflationwhich threw cold water on investors who had expected the central bank to be nearing the end of its tightening cycle.

“Powell said that reducing inflation is still a long way off and that it could be That very well means they won’t stop until the fall,” explains Edward Moya, senior market analyst at OANDA.. “If other central banks seem willing to offer more than a few rate hikes, that could make it easier for the Fed to remain aggressive on tightening.”

In fact, today the Bank of England hiked rates by 50 basis points to as high as 5.00%, while analysts had forecast 25 points. While the Swiss National Bank raised its benchmark interest rates by 25 points.

The Fed left interest rates unchanged at last week’s monetary policy meeting after raising rates ten times in a row. However, officials hinted that there could be two more 25-point hikes beginning in July, a message Powell reiterated before the House of Representatives yesterday. The Fed Chair will resubmit his semi-annual monetary policy report today, this time to the Senate.

In the macroeconomic section today, investors also learned the weekly data for The number of applications for unemployment benefits last week was above expectations at 264,000 From the market.

In fixed income, bond yields continue to rise, with the 10-year offering 3.758%, up three points. For the two-year paper, the yield increases by four points to 4.746%.

On the business side, the online insurer Root is one of the big players on the floor, up 42%, on top of the 59.80% already achieved yesterday. The trigger for these gains is a Wall Street Journal report establishing that Embedded Insurance has offered to buy the company for $19.34 per share.

KB Home falls despite the release of stronger, higher-than-expected results. Earnings per share for the second quarter were $1.94, beating analysts’ expectations of $1.33. Revenue was $1.77 billion versus $1.42 billion expected. Shares are up more than 60% this year.

Darden Restaurants is down about 4%, even though the company reported earnings per share of $2.58, compared to the $2.54 expected. Sales rose 6.4% to 2,770 million, in line with expectations.

However, Olive Garden, which accounts for about 45% of Darden’s sales, reported lower-than-expected results. The Italian chain’s comparable-store sales rose 4.4%, falling short of expectations for 5% growth.

For fiscal 2024, Darden expects net sales of $11.5 billion to $11.6 billion, same-store sales growth of 2.5% to 3.5% and adjusted earnings per share from continuing operations of between 8.55 and 8 $.85.

One of the negative news items of the day is Avid Bioservices, which fell 20%. The company announced earnings per share of $0.00 versus $0.01 expected. Quarterly revenue was $39.8 million compared to the consensus estimate of $38.91 million. Avid Bioservices expects fiscal year revenue of $145-$165 million versus consensus estimate of $181.27 million.

As for analyst recommendations, there is bad news for Alcoa after Morgan Stanley analysts downgraded their rating from in-line to underweight, with a target price of $43-$33, below the current price.

Also cut for Tesla. Shares of the electric vehicle maker fall more than 3% afterwards Morgan Stanley was downgraded to equal weightciting the high valuation after the recent AI-driven rally.

Oil prices fell in commodities markets today, with West Texas futures down 2.57% to $70.62, reflecting a 2.38% decline in Brent crude to $75.22 per month barrel is due.

“Looks like we’re in a position where we wait for the economy to collapse or for central banks to hit their soft-landing targets,” says Craig Erlam, market analyst at OANDA.. “Brent remains in its lowest trading range this year, between $70 and $80, but we are nearing the top end and there is still a lot of momentum in this move.”

The euro lost 0.09% against the dollar to hit an exchange rate of $1.0975 per single currency.

In cryptocurrencies, bitcoin remains above $30,000 after hitting a high of $30,749.45 yesterday, its highest level since April 14 when bitcoin touched $31,102. The last time Bitcoin broke through $30,000 was on April 26th.

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