Stocks Decline as Fed Hawkishness Strengthens Dollar,Yen Weakens
NEW YORK – U.S. stocks fell Wednesday, weighed down by technology shares, as a strengthening dollar and hawkish signals from the Federal Reserve reshaped market sentiment. The yen also depreciated sharply,reaching a 154 yen level against the dollar,prompting increased scrutiny of monetary policy divergence between Japan and the United States.
The shift follows comments from Federal Reserve Chairman Jerome Powell the previous day, stating that a December rate cut was “not the default course.” This stance bolstered the dollar, which rallied to it’s highest level since August. Rising interest rates typically pressure gold prices, as the commodity doesn’t yield interest, and the metal experienced recent volatility, falling sharply after hitting a record high of $4,381.52 on October 20th, though it rebounded Wednesday.
As of 2:17 pm New york time, the spot gold price was $4,005.51 per ounce, up $75.44 (1.9%) from the previous day. December gold futures on the New York Mercantile Exchange (COMEX) rose $15.20, or 0.4%, to close at $4,015.90.
The S&P 500 fell 1% as Meta Platforms experienced a sell-off following an proclamation of increased spending. Treasury yields also climbed, coinciding with Meta’s launch of the year’s largest corporate bond offering. Oil prices remained relatively stable as traders assessed oil buying from India and the outcome of a recent summit between U.S. and Chinese leaders.
“While markets are undergoing a natural correction, we continue to see this bull market as unlike previous bull markets in terms of the breadth and depth of underlying demand for money,” said Sebastian Mullins, head of multi-asset and fixed income at Schroders.
