Stocks Rise as Powell Signals Rate Cuts Still Possible
Market Gains Amid Fed Chair’s Comments
U.S. stocks saw an uptick following Federal Reserve Chairman Jerome Powell’s remarks indicating that rate cuts could still be in the cards for this year. Investors welcomed the news, easing concerns that the Fed might adopt a more hawkish stance due to the recent strong economic performance.
Powell’s Stance on Interest Rates
Powell mentioned that most Fed members are in favor of lowering interest rates this year, but only after seeing more data supporting a sustained decrease in inflation. Despite recent positive economic indicators, Powell reiterated the Fed’s outlook of steady growth, a strong labor market, and inflation gradually moving towards the 2% target.
Market Reactions and Updates
Stocks showed a mixed response to Powell’s comments, with the rising by 0.1%, the increasing by 0.3%, and the edging up by 0.5%. Treasury yields dipped slightly but remained above daily lows, with the 2-year Treasury yield dropping by 1.6 basis points to 4.685% and the decreasing by 4 basis points to 4.359%.
Key Sector Movements
Intel faced a setback, with a more than 7% decline attributed to $7 billion in operating losses for its foundry business over the next few years. On the other hand, Tesla saw a modest 0.8% rise despite a decline in quarterly deliveries. Taiwan Semiconductor Manufacturing’s stock climbed 1.4% following production halts due to a severe earthquake.
Company Highlights
Disney shares fell over 2% after shareholders backed the existing board members in a vote against activist investor Nelson Peltz. Cal-Maine Foods witnessed a 3.2% increase in stock value post strong quarterly results, overshadowing declining egg prices. Paramount Global’s shares dipped by 1.3% amidst talks of a potential deal with David Ellison of Skydance media.
Industry Insights and Outlook
The overall market sentiment remains cautious yet optimistic, with various companies navigating through challenges and opportunities. The ongoing dynamics in the tech, entertainment, and manufacturing sectors reflect the ever-evolving landscape of the global economy.
