Yesterday, US stocks slipped as a record-setting rally took a breather from a string of gains over the past week. It was the worst daily sell-off in months.
Though US stocks have rebounded this morning, here’s an overview of what happened…
The Dow Jones Industrial Average fell more than 1.2%, while the tech-heavy Nasdaq Composite and S&P 500 sank about 1.5%. The down day marked the S&P’s worst single-day performance since October, while it also snapped a nine-day winning streak for the Nasdaq and Dow Jones.
Stocks had been building on a strong year-end rally, with Tuesday’s finish giving the Dow its fifth record close in a row and bringing the S&P 500 closer to its all-time high set in January 2022.
Investors have shrugged off hawkish comments from Federal Reserve officials, who have tried to temper expectations that the central bank will quickly turn to bringing down benchmark rates.
On Wednesday, a surprise drop in UK inflation to its lowest level in two years listed optimism that price pressures are easing in leading economies. But some are questioning whether the faster, earlier rate cuts would end up pushing the US economy into a downturn. Eyes will be on upcoming data for clues as to whether the Fed can nail a “soft landing.”
In individual corporates, all eyes were on FedEx, whose shares tumbled more than 10% after the delivery company missed quarterly profit expectations. It also cut its full-year revenue forecast amid a drop in US Postal Service demand.
At the market open this morning, the S&P 500 popped about 0.8%, making a comeback. Warnings have come from some investors that stocks were ripe for a pullback after a record-breaking rally driven by expectations that that Federal Reserve will pivot to cutting interest rates.
We will see how stocks perform in the remainder of the year.
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