On Thursday markets reversed course closing lower as investors looked to the Federal Reserve for their latest decision on monetary policy. As widely anticipated the Fed kept interest rates unchanged at a range of 2%-2.25%, however in a statement to the press afterwards said that they expect further gradual increases. The Dow finished the session +0.04%, the S&P 500 -0.25% and the Nasdaq fell -0.53%.
Comparing the Fed’s last statement in August to the most recent one, we can see FOMC has recognised falling unemployment, growth in household spending while business fixed investment had moderated. With the expected pause in rate hikes in November investors will look to December where the market is expecting a 93% of a hike.
Looking at some of the movers overnight in the Dow, we had Caterpillar shares fall 2.7% after a stellar performance in the previous session whilst 3M Co shares rose 1.4% and Walgreens Boots Alliance shares rose 1.2%. Travelling into stocks reporting earnings we saw wild swings as Trip Advisor shares soared 15.3% whilst Wynn Resorts took a trip down falling 13.1% along with Qualcomm shares declining 8%.
Of the S&P 500 sectors the financial index led the way advancing 0.32% as seen in strength in Bank of America shares +1.16% and JP Morgan shares +0.80%. Yet the main theme overnight was the falling oil prices that flowed into the energy and basic materials sector. The S&P 500 index was the worst performer falling 2.2% with losses in the industry heavyweights Exxon Mobil -1.59% and Chevron -1.25%. However the losses more defined in the smaller names exposed to the oil market as ConocoPhillips shares fell 4.46% and EOG Resources fell 3.94%. The main cause for the decline in oil prices in October stems from signs of slowing global demand and rising output from producers. Earlier this week we saw President Trump issue waivers to eight countries allowing to import Iranian crude for the next 180 days.
Stocks moving in after-hours trading include Yelp shares plummeting 27 percent as the company missed revenue guidance, gaming giant Activision Blizzard shares falling 9 percent following a decline in monthly active users and Dropbox shares rising 7 percent.
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Chart of the Day: Qualcomm (QCOM) daily chart