FOMC Meeting: Interest Rates Expected to Rise, Stocks Rallying, Bitcoin Falls
This week, the Federal Open Market Committee (FOMC) is expected to raise its benchmark interest rate by 25 basis points (0.25%) at its meeting on Tuesday and Wednesday.[0] Investors will be closely watching the tone of the meeting to assess when the central bank intends to stop hiking rates altogether.[1] The CME Group's FedWatch puts the chances of the hike at a virtual lock, with an 82.5% chance of a similar hike in March.[2] Stocks have rallied in January, with investors seemingly brushing off Fed Chair Jerome Powell’s “higher-for-longer” warning.[3] The S&P 500 experienced a decrease of 0.6% while the Dow Jones Industrial Average went down by 43 points, amounting to a 0.[4] The Nasdaq Composite went down by 1%.[4]
Treasury yields were higher ahead of the Fed decision on Wednesday.[5] US10Y rose by 2 basis points to 3.54%, while US2Y increased by 4 basis points to 4.25%.[6] The U.S. dollar index, which tracks the greenback against a baskets of its global peers, was marked 0.02% lower at 102.12.[7]
Before the bell, Dow Jones Industrial Average futures lost 32 points, or 0.1%, while the S&P 500 futures lost 0.1%, and Nasdaq Composite futures rose 0.1%.[8] At 06:55 ET (11:55 GMT), the S&P 500 futures traded 41 points lower at a 1.02% decrease, the Nasdaq 100 futures decreased by 166 points at a 1.36% rate, and the Dow futures contract decreased by 254 points at a 0.75% rate.[9]
The S&P 500 is on track to experience its second-best January since the year 2000, only second to its 7.9% increase in 2019.[10] Shares of Alibaba (BABA) experienced a 5% drop on Monday following news that the Chinese e-commerce giant is planning to relocate its headquarters to another country. Reports indicate that the new campus could be located in Singapore.[11] On Monday morning, SOFI Technologies (SOFI) saw a 13% increase in their stocks following their positive prediction for the upcoming year's earnings.[11] CoinMarketCap reported that Bitcoin (BTC-USD) has decreased by more than 1% in the past 24 hours, with the current price at $23,168.[11]
Investors are also anticipating the US jobs report later this week.[3]
0. “Nasdaq Futures Slump As Microsoft's Outlook Dampens Tech Recovery Hopes — Analyst Warns Of More Bumpiness …” Benzinga, 25 Jan. 2023, https://www.benzinga.com/news/earnings/23/01/30563847/nasdaq-futures-slump-as-microsofts-outlook-dampens-tech-recovery-expectations-analyst-warns-of-more
1. “Dow Jones, Nasdaq, S&P 500 weekly preview: Why analysts expect stocks to rotate lower By Investing.com” Investing.com, 30 Jan. 2023, https://www.investing.com/news/stock-market-news/dow-jones-nasdaq-sp-500-weekly-preview-why-analysts-expect-stocks-to-rotate-lower-2991071
2. “Stocks Edge Lower, Amazon, Google, GE, Microsoft – Five Things To Know” TheStreet, 24 Jan. 2023, https://www.thestreet.com/markets/stocks-lower-amazon-google-ge-microsoft-5-things-to-know
3. “Nasdaq 100 Suffers Its Biggest Drop in a Month: Markets Wrap” Yahoo Canada Finance, 30 Jan. 2023, https://ca.finance.yahoo.com/news/stocks-buoyed-china-reopen-rate-004447572.html
4. “U.S. Stocks Fall Ahead of Fed Meeting” The Wall Street Journal, 30 Jan. 2023, https://www.wsj.com/articles/global-stocks-markets-dow-update-01-30-2023-11675081088
5. “Dow Jones Falls With Fed Meeting In Sight; Tesla Stock Upgraded To Buy After 33% Surge” Investor's Business Daily, 30 Jan. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-fall-with-fed-meeting-in-sight-tesla-stock-upgraded-to-buy
6. “Tech Buyers Snub Warnings as Nasdaq Keeps Rallying: Markets Wrap” Yahoo! Voices, 27 Jan. 2023, https://www.yahoo.com/now/asia-stocks-rally-tech-pulls-231753998.html
7. “Stocks Move Lower, Microsoft, Tesla, Boeing, Fox In Focus – Five Things To Know” TheStreet, 25 Jan. 2023, https://www.thestreet.com/markets/stocks-move-lower-microsoft-tesla-boeing-fox-5-things-to-know
8. “Stocks Poised for Slightly Lower Open” Barron's, 29 Jan. 2023, https://www.barrons.com/articles/stocks-poised-for-muted-open-51675034779
9. “U.S. stock futures move broadly lower ahead of Fed decision, corporate results By Investing.com” Investing.com, 30 Jan. 2023, https://www.investing.com/news/stock-market-news/us-stock-futures-move-broadly-lower-ahead-of-fed-decision-corporate-results-2991037
10. “Stocks close lower, Dow sheds more than 250 points to snap six-day win streak” CNBC, 29 Jan. 2023, https://www.cnbc.com/2023/01/29/stock-market-news-live-updates-futures-open-to-close.html
11. “Stock market news live updates: Stocks sell off to start blockbuster week” Yahoo News, 30 Jan. 2023, https://news.yahoo.com/stock-market-news-live-updates-january-30-2023-124137866.html