U.S. stocks rose slightly at the open of Wednesday’s session before giving up gains, continuing a sluggish start to the week as investors digested new economic data and awaited comments from Federal Reserve Chairman Jerome Powell. .
The S&P 500 (^GSPC) slipped 0.3% in early trading, while the Dow Jones Industrial Average (^DJI) fell 0.6%. The tech-heavy Nasdaq Composite (^IXIC) rose 0.2%.
Shares ended lower on Tuesday, even as concerns over China’s strict zero-COVID policy eased. U.S.-listed Chinese stocks rose for the third day, adding to a record rally this month as Beijing on Tuesday announced plans to speed up vaccinations for Chinese seniors, boosting optimism among investors on the way forward to ease COVID restrictions amid nationwide protests.
The US dollar was weaker on Wednesday morning, while the yield on the benchmark 10-year Treasury slipped to 3.733% from 3.755% on Tuesday. In oil markets, global benchmark Brent (BZ=F) climbed 2.3% to $82.90 a barrel. WTI crude oil (CL=F) rose 2.6% on Wednesday to $80.25 a barrel.
For investors, however, all eyes will be on Federal Reserve Chairman Jerome Powell’s speech Wednesday afternoon at the Brookings Institution, the last speech before the Fed’s next rate-setting meeting in mid -december. But “investors are swinging between bracing for a repeat of Jackson Hole and seeing Powell reiterating the views of other recent Fedspeaks,” wrote Andrew Tyler, head of US Market Intelligence at JP Morgan.
As the Fed strives to fulfill its dual mandate of price stability and maximum sustainable employment, Powell is widely expected to signal that the Fed is on track to slightly accelerate its pace of policy tightening. monetary policy, likely to return to 50-basis point increase.
This speech also comes less than two weeks before the release of consumer price data for November.
“All eyes will continue to be on inflation at this point,” Anthony Saccaro, president of Providence Financial & Insurance Services, told Yahoo Finance Live on Tuesday.
Ahead of Powell’s scheduled speech on Wednesday, US Secretary Janet Yellen weighed in on the competence of the Fed as an organization saying they are “qualified people trying to make their best judgment.”
Early in the day, investors studied another flurry of macro data. The ADP jobs report showed private companies added 127,000 jobs in November, below expectations of around 200,000, in further signals of a weak labor market.
“Turning points can be hard to grasp in the labor market, but our data suggests that Federal Reserve tightening is having an impact on job creation and wage gains,” said Nela Richardson, chief economist at ADP. , in a press release. “Furthermore, companies are no longer in hyper-replacement mode. Fewer people are quitting and post-pandemic recovery is stabilizing.
Also on the data front:
US GDP for the third quarter of 2022 grew at an annual rate of 2.9%, according to a government estimate. The report also revealed that the Personal Consumption Expenditure (PCE) index, which measures the price of consumer goods and services, rose 4.3% in the quarter, an upward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index rose 4.6%, also revised up by 0.1 points.
U.S. job postings fell to 10.33 million in October, down 10.68 from the previous month, according to the Bureau of Labor Statistics’ survey of job postings and labor turnover. staff (JOLTS). Economists polled by Bloomberg expected job openings to fall to 10.25 million on the month.
Contracts signed to buy existing homes in the United States fell 4.6% in October, the fifth straight decline as higher rates wane on demand, data from the National Association of Realtors showed on Wednesday.
Chicago’s Purchasing Managers’ Index (PMI) fell to 37.2, below expectations of 47.0, the lowest reading since June 2020.
Finally, the Fed’s Beige Book, a survey of regional Fed banks, will be released on Wednesday afternoon.
On the earnings front, Salesforce (CRM), Five Below (FIVE), Okta, Inc. (OKTA), Snowflake (SNOW) and Victoria’s Secret (VSCO) are expected to report earnings on Wednesday.
Shares of CrowdStrike Holdings, Inc. (CRWD) fell more than 18% after the cybersecurity company’s expected quarterly revenue fell short of analysts’ expectations as customers cut spending and delayed purchases due to macroeconomic headwinds. DoorDash (DASH) is laying off about 1,250 people in a bid to cut expenses, according to a Bloomberg report, citing a memo from its CEO, Tony Xu.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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