FOMC Meeting: Interest Rates Expected to Rise, Stocks Rallying, Bitcoin Falls
By 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
