Treasury yields dropped on Thursday, and investors took a gain in stocks, believing the Federal Reserve may be finished hiking rates by 2023.
A 0.9% increase, or 304 points, was seen in the Dow Jones Industrial Average. The Nasdaq Composite increased 1.3% and the S&P 500 increased 1.2%, respectively.
The yield on the 10-year Treasury bond decreased by almost 14 basis points to 4.65%, as bond yields plummeted. This happens when last month’s benchmark yield crossed 5%.
Shares of Moderna fell 15% following the pharmaceutical company’s shocking third-quarter loss announcement. Following an unexpected loss and gloomy revenue estimate for the fourth quarter, SolarEdge saw a more than 15% decline in value.
These actions follow the Fed’s decision on Wednesday to raise its estimate of the US economy while maintaining the status quo on interest rates. Jerome Powell, the chair, did not completely rule out raising rates at the December meeting, though.
“We anticipated Powell to speak forcefully and exert every effort to prevent markets from seeing the two consecutive “skips” in interest rate increases as approval for high-risk assets,” stated Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance. However, “we were shocked by how specific in his phrasing that the Fed will not hesitate to raise rates again in the near future” regarding their continued concern about inflation.
Thursday morning’s data on decreasing inflation and a loosening labour market was taken in by investors. In contrast to economists surveyed by Dow Jones who predicted a 0.7% increase, labour costs decreased by 0.8% in the third quarter.
For the week ending October 28, weekly jobless claims increased somewhat on Thursday to 217,000, above both the Dow Jones consensus forecast of 214,000 and the prior week’s total of 210,000.
Following the Fed’s announcement on Wednesday, stocks increased. On Wednesday, the S&P 500 and Nasdaq Composite both finished the day higher than 1%, while the Dow gained more than 200 points.
Source (CNBC)
