Fed minutes cause bad mood on the stock market

NEW YORK (dpa-AFX) – Details from the December minutes of the US Federal Reserve (Fed) put the US stock exchanges under pressure on Wednesday. The Dow Jones Industrial , which had risen to a record high of just under 37,000 points before the Minutes was published, closed 1.07 percent weaker at 36,407.11 points.

The S&P 500 , which had reached a record on Tuesday, fell by 1.94 percent to 4700.58 points. The tech-heavy Nasdaq 100 dropped 3.12 percent to 15,771.76 points. At the same time, yields rose on the US bond market and the US dollar also rose.

As can be seen from the Minutes, some members of the Fed’s Monetary Policy Committee spoke out in favor of starting to reduce the central bank’s balance sheet shortly after the first rate hike. In addition, it was repeatedly emphasized that both economic and inflation developments speak in favor of a faster exit from the loose monetary policy. A faster rate hike than previously expected could be justified, it said.

The expectation of rising interest rates was already generally reflected on the stock exchanges in the first few days of the new year – in such a way that an increased reorientation of investors away from growth stocks and towards value stocks could be observed. That was a major reason for the strong start to the year for the standard values. The Dow had gained 1.3 percent within two trading days, while the high-growth tech stocks – as measured by the Nasdaq indices – fell significantly on balance.

On this Wednesday, however, all sub-indices of the S&P 500 were in the red at the end of trading, even if tech stocks were among the biggest losers.

With a view to individual values, the focus was primarily on analyst comments. Salesforce shares plummeted in the Dow, this time by 8.3 percent. Adobe lost 7.1 percent on the Nasdaq 100 after the major Swiss bank UBS canceled its buy recommendations for the two software stocks.

In contrast, the S&P 100 for the shares of Pfizer went up 2.0 percent. They benefited from a Buy recommendation from Bank of America. Analyst Geoff Meacham expects the oral Covid-19 therapy Paxlovid to be marketed very successfully in the new year. The day before it became known that the US government would double its order.

AT&T also rose 2.2 percent in the S&P 100. The telecommunications group won more new mobile contract customers last year than it has done in ten years. He also announced successes in new business with streaming offers: According to initial calculations, the annual target of up to 73 million worldwide users will likely have been exceeded in 2021.

The Euro came under pressure after the minutes, trading at $ 1.1312 on Wall Street close. Before that, it was up to $ 1.1346. The European Central Bank set the reference rate at 1.1319 (Tuesday: 1.1279) dollars. The dollar cost 0.8835 (0.8866) euros.

US Treasuries widened their losses. The futures contract for ten-year treasuries (T-Note-Future) last fell by 0.34 percent to 128.94 points. The yield on ten-year government bonds rose to 1.696 percent./ck/he
— By Claudia Müller, dpa-AFX —

– .