Stocks Drop as Fed Chairman Powell Speaks on Interest Rates; Uber, Alphabet & Chipotle Earnings in Focus
By Stocks fell Wednesday as investors focused on Fed Chairman Jerome Powell’s remarks about the trajectory of interest rates.[0] The Dow Jones Industrial Average lost 0.6% while the S&P 500 dropped 1.1% and the Nasdaq Composite retreated 1.7%.[1] [2]
Uber Technologies (UBER) climbed more than +6% in pre-market trading after reporting Q4 revenue of $8.61 billion, stronger than the consensus of $8.47 billion.[3] Meanwhile, Alphabet (GOOGL) plunged 7.7% following a mishap at its AI event to demonstrate its new chatbot, Bard.[4] In its initial presentation, the bot encountered an error.[5] [5]
Cybersecurity company Fortinet Inc. (FTNT) rallied over 11% in premarket trading following its fourth-quarter beat.[6] Fortinet (FTNT) surged 12% in high trading volume, breaking the 200-day moving average.[4] Since May 7, 2020, Fortinet has enjoyed its most successful day with a 21% surge in its stock[7]
After releasing its Q4 earnings per share which exceeded expectations, CME Group (CME) experienced a 5.4% increase in its stock.[4] According to Dow Jones Market Data, the stock closed near its biggest surge since it rose 5.9% on April 27, 2022.[5]
Chipotle Mexican Grill (CMG) experienced a drop of over -3% after revealing that their Q4 comparable same-store sales went up by +5.60%, far lower than the estimated +7.04%.[8]
The Federal Reserve is expected to raise the fed funds rate by a smaller quarter points each at the March and May meetings.[6] However, data will determine the final decision.[6] Traders projected a 68.8% probability that the rate will peak at 5-5.25% by May, followed by at least 25 basis points of cuts by the end of 2023, according to the CME’s FedWatch tool.[9]
Jerome Powell, Chairman of the Federal Reserve, is set to address the Economic Club of Washington on Tuesday.[10] So far, 63% of S&P 500 companies have reported fourth-quarter earnings, with 69.5% beating analyst expectations.[11] The yield on the 10-year Treasury rose 10 basis points to 3.63%.[12]
0. “Stocks Fall as Investors Keep Eye on Path of Interest Rates” The Wall Street Journal, 8 Feb. 2023, https://www.wsj.com/articles/global-stocks-markets-dow-update-02-08-2023-11675858404
1. “Dow futures trade lower, earnings in focus By Investing.com” Investing.com, 5 Feb. 2023, https://www.investing.com/news/stock-market-news/dow-futures-trade-lower-earnings-in-focus-2995587
2. “Futures Rise, Disney Jumps; Why This Pullback Looks Healthy” Investor's Business Daily, 9 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-disney-jumps-why-this-market-pullback-looks-healthy/
3. “Markets Today: Stocks Fall on Mixed Corporate Earnings Results” Barchart, 8 Feb. 2023, https://www.barchart.com/story/news/14015987/markets-today-stocks-fall-on-mixed-corporate-earnings-results
4. “Stocks Fall Back on Mixed Earnings and Higher Bond Yields” Barchart, 8 Feb. 2023, https://www.barchart.com/story/news/14021624/stocks-fall-back-on-mixed-earnings-and-higher-bond-yields
5. “Stock Market Closed Near Day's Lows; Pure Barre Parent Gaps Down Sharply” Investor's Business Daily, 8 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/stock-market-inches-up-from-lows-google-demo-causes-stocl-to-drop
6. “Nasdaq, S&P Futures Dip As Fed's Data-Dependency Introduces Caution – Invesco QQQ Trust, Series 1 (NASDAQ” Benzinga, 8 Feb. 2023, https://www.benzinga.com/news/earnings/23/02/30803509/nasdaq-s-p-futures-dip-as-feds-data-dependency-introduces-caution-disney-earnings-on-tap
7. “Stock Market Losses Widen At Midday; Alphabet Tumbles On Chatbot Blunder” Investor's Business Daily, 8 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/stock-market-eases-as-investors-mull-earnings-deal-news-this-fashion-stock-plunges-25
8. “Stock Market News Today: GOOG and Tech Selloff Lead Stocks Lower” TipRanks, 8 Feb. 2023, https://www.tipranks.com/news/stock-market-news-today-futures-slide-as-markets-reassess-powells-words
9. “Dow ends down 200 points, Nasdaq falls 1.7% after Fed officials say more interest rate hikes could be needed to cool …” msnNOW, 8 Feb. 2023, https://www.msn.com/en-us/money/markets/dow-ends-down-200-points-nasdaq-falls-17percent-after-fed-officials-say-more-interest-rate-hikes-could-be-needed-to-cool-inflation/ar-AA17eWEq
10. “Counter Moves, Powell's Speech, Russia Deficit, Microsoft and Google's AI Rumble” RealMoney, 7 Feb. 2023, https://realmoney.thestreet.com/markets/counter-moves-powell-s-speech-russia-deficit-microsoft-and-google-s-ai-rumble-16115359
11. “Dow futures jump 200 points as investors evaluate latest batch of earnings” CNBC, 9 Feb. 2023, https://www.cnbc.com/2023/02/08/stock-market-futures-open-to-close-news.html
12. “Stock Market News Today: Yields Jump Ahead of Speech From Fed's Powell” Markets Insider, 6 Feb. 2023, https://markets.businessinsider.com/news/stocks/stock-market-news-today-dow-sp500-bond-yields-jerome-powell-2023-2
