Marcus Today Pre-Market Podcast – Thursday 4th May
US equities closed mostly lower and near their worst levels after Fed Chair Powell's post-FOMC remarks. The Fed raised rates by 25 basis points to 5-5.25%, in line with the March expectations. The FOMC statement scrapped previous guidance that the Fed expects additional policy firming needed to attain a sufficiently restrictive stance. Meanwhile, ADP's April private payrolls report showed 296K in job gains, well ahead of consensus, and the highest level since July 2022. USD Index fell notably against the yen, US treasuries edged lower, and European markets climbed after their biggest fall in a month. Dow Jones down 270 points (-0.8%) closing near session lows. Dow at best up 127. S&P 500 down 0.70%. NASDAQ down 0.46%. VIX Volatility Index up 3.1%. European markets recovered some of yesterday’s losses, FTSE +0.20%, Germany +0.56%, France +0.28%. SPI Futures are down 35 points (-0.49%).
The Fed raised interest rates by 25bps to a range of 5%-5.25%, as expected, in its May meeting. This marks the 10th increase and brings borrowing costs to their highest level since September 2007. However, the Fed has taken out language from its policy statement saying it anticipates further rate increases would be needed and noted it would consider factors such as overall tightening cycles, policy lags, and other economic and financial developments in determining whether more policy firming is necessary. The Fed also expressed concerns about tighter credit conditions for households and businesses, which could weigh on economic activity, hiring, and inflation. Fed Chair, Jerome Powell, acknowledged that policy is tight, suggesting the Fed may have done enough with rates.
Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.
Why not sign up for a free trial? Get access to expert insights and research and become a better investor.
Create your
podcast in
minutes
It is Free