Stock futures flat after volatile session following latest Fed interest rate hike

Traders react as Federal Reserve Chairman Jerome Powell speaks on a screen on the floor of the New York Stock Exchange (NYSE) in New York, November 2, 2022.

Brendan McDermid | Reuters

Equity futures were little changed on Wednesday evening, holding onto losses in the daily trading session after the Federal Reserve announced another interest rate hike and signaled that no pivot or rate cut is in sight. come so soon.

Futures contracts linked to the Dow Jones Industrial Average slipped 58 points, or 0.18%. S&P 500 and Nasdaq 100 futures fell 0.21% and 0.20% respectively. Shares of Qualcomm, Roku and Fortinet slipped after reporting disappointing quarterly results and guidance.

Traders had anticipated the central bank’s 0.75 percentage point rate hike and initially interpreted the Fed’s statement as dovish, sending stocks higher.

Those gains reversed when Federal Reserve Chairman Jerome Powell said it was “premature” to talk about a pause in rate hikes and that the terminal rate would likely be higher than expected.

“We still have some way to go and the data received since our last meeting suggests that the ultimate level of interest rates will be higher than expected,” he said.

The Dow Jones Industrial Average ended Wednesday’s trading session down 416 points, down 1.3%, dampening its strong October rebound. The S&P 500 fell 2% and the Nasdaq Composite fell 2.8%.

Markets will likely continue to swing until it is clear that inflation has subsided and the Fed has stopped raising rates. Any data showing that the US economy is not slowing as the central bank tightens policy will likely weigh on stocks.

The next major report is for October’s nonfarm payrolls, which is due out on Friday.

“You get a good number of jobs, in other words a good unemployment rate that’s not going up, so the market is in big trouble,” Guy Adami, adviser advocacy director at Private Advisor Group, said on CNBC “Quick Money.”

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