Julius Zachary, from California in full BPE gear, poses for photos with his friend in front of Charging Bull, sometimes referred to as the Wall Street Bull, a bronze sculpture in Manhattan New York’s finance district, May 19, 2020.
Timothy A. Claire | AFP | Getty Images
U.S. stock futures flattened on Wednesday night as traders digested the Federal Reserve’s promise to keep rates low for the next few years.
The Dow Jones Industrial Average traded slightly below the average flatline. The futures of the S&P 500 and Nasdaq 100 have also changed a bit.
Members of the Federal Open Market Committee pointed out that the U.S. rate may be overnight Bound to zero until 2023 The central bank is trying to increase inflation. In a statement, the panel said: “As inflation continues to exceed this long-term target, inflation should reach moderately above 2% for some time, thus averaging 2% over time.”
Federal Reserve Chairman Jerome Powell reiterated this position at a news conference, saying “until these results are reached, including maximum employment, there will be an easy monetary policy.”
He added that parts of the US economy would continue to struggle if lawmakers did not move forward with further financial incentives. Powell’s comments came as lawmakers struggled to reach an agreement on the new Corona virus aid bill. Earlier on Wednesday, White House Chief of Staff Mark Meadows said he hoped a deal could be struck.
In general, the prospect of lower rates in the long run motivates buying in stocks. However, Wednesday was not like that.
Both the S&P 500 and the Nasdaq closed lower and the Dow ended well above its session high. The Big Tech dragged the S&P500 and the Nasdaq, while Apple, Facebook and Microsoft all fell behind.
“Following the central bank’s announcements, key indices have returned to their short-term trading range, confirming that the bulls are not yet out of the wild,” said Ken Berman, founder of Gorilla Trades. “While there was nothing scary in today’s central bank announcements, the stocks performed in a rough manner, especially in the technology sector.”
On Thursday, Wall Street will receive the latest look at the US Weekly Unemployment Claims. U.S. housing start-up data is also set for release.
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