May 24, 2022

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S&P 500 Ended Lower After Fed Minutes

S&P 500 Ended Lower After Fed Minutes

A screen displays a chart of stocks at a workstation on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid

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  • Minutes: Fed ‘generally approved’ $95 billion in monthly runoff
  • Technology sector, declining growth shares, and utilities acquisition

APRIL 6 (Reuters) – S&P 500 Index (.SPX) It fell Wednesday, with sharp declines in technology and other growth stocks, minutes after the Federal Reserve’s March meeting sharpened investor focus on the US central bank’s plans to fight inflation.

Federal Reserve officials “generally” agreed last month to cut $60 billion a month from the bank’s Treasury holdings and $35 billion of its holdings of mortgage-backed securities, with the amounts phased out over a period of more than three months “or a little longer.” , according to March 15-16 policy meeting minutes. Read more

Wall Street’s major indexes were solidly lower ahead of the minutes’ release, after dropping the previous day when comments from Federal Reserve Governor Lyle Brainard raised concerns about the Fed taking more aggressive action to fight inflation.

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“The Fed is determined to rein in inflation, and we can only hope and pray that there will be a soft landing for the economy and not a hard one that pushes us into recession,” said Tim Greske, senior portfolio strategist at Ingalls. & Snyder.

According to preliminary data, the S&P 500 . index (.SPX) It lost 44.80 points, equivalent to 0.99%, to close at 4,480.32 points, while the Nasdaq Composite lost (nineteenth) It lost 316.41 points, or 2.23%, to 13,887.75 points. Dow Jones Industrial Average (.DJI) It fell 145.47 points, or 0.42%, to 34495.71 points.

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Technology led the declines (.SPLRCT) and other growth stocks. Utilities sector (.SPLRCU) acquired.

Wall Street indexes had already fallen sharply for a second day in a row, as Brainard’s comments on Tuesday raised fears of aggressive central bank action.

Brainard said she expects a combination of interest rate increases and a rapid balance sheet run-off to put US monetary policy in a “more neutral position” later this year. Read more

“It’s one of the more pessimistic members of the FOMC, so for it to come out aggressively in eliminating inflation pressures with more aggressive policy and tightening in interest rates, I think that took the market a little bit by surprise and I think you’d have to say, Anthony Saglimpin, market strategist,” said Anthony Saglimpin, a market strategist. Global at Ameriprise: “We’re seeing it continue today.”

The prospect of a more hawkish Fed has led to a tough start to the year for stocks, particularly technology and growth stocks whose valuations are more vulnerable to higher bond yields. The Ukrainian crisis has heightened concerns, particularly about worsening inflation as commodity prices rise.

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(Additional reporting by Louis Krauskopf in New York, Noel Randwich in San Francisco, Bansari Mayor Kamdar and Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalovila, Shunak Dasgupta and Richard Chang

Our criteria: Thomson Reuters Trust Principles.