NEW YORK (dpa-AFX) – The prospect of a less expansive monetary policy by the US Federal Reserve (Fed) weighed on Wall Street somewhat on Wednesday. The leading index Dow Jones Industrial (Dow Jones 30 Industrial) expanded its recent losses somewhat in early trading and fell 0.14 percent to 35,495.45 points. The market-wide S&P 500 fell 0.19 percent to 4625.29 points. The technology-heavy NASDAQ 100 fell 0.61 percent to 15,817.92 points.
In late trading, Fed Chairman Jerome Powell will comment on growth and inflation, among other things. In the eyes of the markets is the bond purchase program of the central bank, which was launched during the Corona crisis to support the economy. Economists expect the central bank to curb monthly purchases more quickly than previously planned – despite ongoing pandemic concerns about the Omikron variant of the coronavirus. As a result, the Fed could raise key interest rates earlier than previously expected in the coming year, which would make fixed-income bonds more attractive compared to stocks.
“The central question is how hard the Fed wants to fight against the ever increasing inflation,” said strategist Jürgen Molnar from trading house Robomarkets. It’s about the pace of slowing bond purchases and how often and when the Fed raises interest rates. “If the Fed goes too far with its measures, this is likely to be taken up negatively by the stock market.” On the other hand, if there is a lack of determination to fight inflation, that would also be a negative signal, as inflation fears would then prevail in the market. “It is and will be a tightrope walk by the Fed”.
Meanwhile, US retail sales increased only moderately in November in a month-on-month comparison. The sales of the department store chains even sagged significantly. The shares of the industry representatives Macy ?? s (Macys), Kohl ?? s (Kohls) and Nordstrom lost between around four and more than one percent.
Positive news came from Eli Lilly (Eli Lilly and): Thanks to the business with corona antibodies, the pharmaceutical company is more optimistic for the current year. This increased the number of shares at the top of the S&P 500 by almost ten percent.
In the wake of this, Pfizer’s papers continued their hunt for records and recently gained a good four percent. The US pharmaceutical company had presented additional study data on the drug Paxlovid against Covid-19 the day before. According to Pfizer, the agent significantly lowers the risk of hospitalization or fatal disease in high-risk patients./la/jsl
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