Wall Street Stocks Drop with Fed’s Decision Imminent Today
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- Stocks on Wall Street tumble for a second straight day with Nasdaq down more than 1%
- The US Federal Reserve expected to speed up the pace of stimulus withdrawal
What’s on Focus in the Markets?
Wall Street stocks extended their decline into a second straight day on Tuesday. Investors scrambled to position for the upcoming Federal Reserve decision slated for today. That said, the major indexes in the US slipped further with the Nasdaq Composite losing 1.1% on the day.
Earlier in the session, the tech-heavy index was lower by more than 2% while technology companies endured heavy selling pressure. In addition, the S&P500 and the Dow Jones Industrial Average declined 0.8%, and 0.3%, respectively.
US futures today hover slightly positively as financial markets are anticipating the conclusion of the Fed’s final meeting of 2021.
What’s New Around the Markets?
The US Federal Reserve, headed by Chair Jerome Powell, began its two-day meeting yesterday. Today, the market will be watching the press conference by Mr. Powell. In his speech, the Fed Chair is likely to introduce more detail into the bank’s tapering process.
Tapering, or reducing, the monetary stimulus began in November. In more detail, the $120 billion in the monthly stimulus is being rolled back by $15 billion a month. This, however, could switch to a faster wind-down due to several factors.
First, inflation in the US and worldwide is surging. November’s US inflation print landed at a 6.8% increase over the previous twelve months. Moreover, the producer price index report, released Tuesday, showed wholesale prices rose 9.6% from a year ago. In other words, the prices at which producers sell goods to businesses jumped at the fastest pace on record.
This highlighted growing price pressures, which could prompt Fed officials to act not only with faster taper but also quicker interest rate hikes.
What’s the Latest News on Bitcoin?
The price of bitcoin, in the meantime, is gyrating near $48,000 early on Wednesday. Also, Ether has been pinned near $3,900 per token today as the crypto market is trading mostly sideways.
Still, a single coin outperformed major cryptocurrencies Tuesday fueled by the power of an Elon Musk tweet. Dogecoin, the digital currency created as a joke, shot up as much as 40% after an endorsement by Elon Musk.
“Tesla will make some merch buyable with Doge & see how it goes,” Mr. Musk wrote in a tweet on Tuesday morning. The message by the Tesla CEO launched Dogecoin to over 22 cents, after trading at 16 cents earlier in the day.
Elon Musk, who was named TIME Magazine’s Person of the Year, received the Financial Times recognition as Person of the Year today.
What’s Next for Traders and Investors?
Looking ahead into the day, all focus will be on the Fed’s policy meeting. On this note, heightened volatility is expected due to the importance of the event. Keep in mind that surprising announcements could rattle the wider financial markets.
Today’s Economic Calendar (EST times)
- 08:30 am, USD, Retail Sales (MoM) (Nov)
- 08:30 am, CAD, Core CPI (MoM) (Nov)
- 02:00 pm, USD, Fed Interest Rate Decision
- 02:00 pm, USD, FOMC Statement
- 02:00 pm, USD, FOMC Economic Projections
- 02:30 pm, USD, FOMC Press Conference
- 04:45 pm, NZD, GDP (QoQ) (Q3)
- 07:30 pm, AUD, Employment change (Nov)
Check our calendar right here.
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