In early Wednesday trading, US stocks stumbled as investors turned their gaze towards an impending speech by Federal Reserve Chair Jerome Powell, seeking insights into the potential trajectory of interest rates.
The S&P 500 (^GSPC) experienced a modest decline of approximately 0.1%, while the Dow Jones Industrial Average (^DJI) danced precariously around the flatline. Conversely, the Nasdaq Composite (^IXIC) led the downturn, witnessing a dip of nearly 0.4%, following a day of widespread losses across major indices on Tuesday.
The once-promising start to the year for stocks has gradually waned, driven by robust economic indicators that have cast doubt on the likelihood of three anticipated rate cuts by the Federal Reserve. Investors have recalibrated their expectations, anticipating a more conservative approach from policymakers, potentially delaying any substantial easing measures.
Adding to investor apprehension, Atlanta Fed President Raphael Bostic heightened concerns by indicating on Wednesday that he foresees the Fed’s inaugural interest rate cut in the fourth quarter.
Attention now turns to Powell, whose forthcoming speech on the economic landscape is poised to provide valuable clues regarding the Federal Reserve’s stance leading up to its June meeting. Additionally, market participants will closely monitor appearances by Michael Barr and other Fed officials for further insights.
In parallel, all eyes are on the outcome of the contentious proxy battle between Disney and activist investor Nelson Peltz. The results of a pivotal shareholder vote, slated for later Wednesday, will determine whether Disney secures adequate support to repel the proposed board shake-up advanced by Peltz’s Trian, as per sources familiar with the matter.
In the realm of individual stock movements, Intel (INTC) shares endured a notable decline of around 5% subsequent to the company reporting amplified operating losses within its foundry business.
Meanwhile, Intel’s competitor TSMC (TSM) faced production disruptions following a significant earthquake in Taiwan, prompting concerns regarding the supply chain for technology giants like Apple (AAPL) and Nvidia (NVDA). Consequently, its US-listed shares experienced a minor downturn.
As the trading day progresses, investors remain on edge, eagerly awaiting Powell’s remarks and pivotal developments in corporate and economic landscapes that could shape the trajectory of US stocks in the sessions ahead.
