November 30, 2022

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Wall Street rebounds on hopes of a smaller Fed rate hike

Wall Street rebounds on hopes of a smaller Fed rate hike
  • Some Fed officials want to slow increases – Wall Street Journal
  • Alphabet, Twitter and Meta Fall after Snap ad warning
  • AmEx down, braces for a tighter macro with a build back-up
  • Verizon Communications Q3 profit drops due to loss of subscribers
  • Indices Gain: Dow 1.47%, S&P 1.27%, Nasdaq 1.04%

Oct 21 (Reuters) – The S&P 500 and Dow rose on Friday after a report that the U.S. Federal Reserve is likely to debate signaling plans to raise interest rates less often in December, while capping declines in major media companies. Social Media Gains on Nasdaq.

Some Fed officials are beginning to eavesdrop on their desire to slow the pace of increases soon, According to the Wall Street Journal,and how to indicate plans to approve a smaller increase in December.

“I would say that the Fed is now looking to mitigate or slow down its rate increases, underlining its drive for price stability,” said Joe Brusolas, chief economist at RSM, a US-based advisory firm.

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Stock markets were weighed down by fears of a violent rate-raising cycle pushing the US economy into recession, with the 10-year US Treasury yield hitting a 15-year high earlier in the session.

Traders are still widely anticipating a fourth rise of 75 basis points at the November central bank meeting. FEDWATCH

The report helped markets recoup declines seen earlier in the session when Snap Inc (SNAP.N) It fell 30.86% after reporting the slowest quarterly revenue growth in five years as advertisers cut spending due to inflation and geopolitical problems.

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Other companies that rely heavily on advertising revenue such as Alphabet Inc (GOOGL.O) and Meta Platforms Inc (META.O) It fell 0.20% and 2.52%, respectively, pushing the S&P 500 telecom services sector index (.SPLRCL) down 0.55%.

“It is not uncommon for companies to cut back on advertising spending during fears of an economic slowdown,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“Right now, you don’t want to be on Snap or Meta, and you’ll probably go to Alphabet.”

12:00 PM ET, Dow Jones Industrial Average (.DJI) Up 444.56 points or 1.47% at 30,778.15, the Standard & Poor’s 500 (.SPX) It rose 46.56 points, or 1.27%, to 3712.34 points.

Nasdaq Composite (nineteenth) It was up 110.56 points, or 1.04%, to 10,725.41 points.

The third-quarter reporting season so far has been better than feared, leading analysts to raise their S&P 500 companies’ earnings forecast to a 3.1% increase from 2.8% earlier in the week, according to Refinitiv data.

It is still well below the 11.1% rise that was expected at the beginning of July.

After earnings-driven gains earlier this week, the S&P 500 and Nasdaq are preparing for their best week in six, while the Dow is looking forward to its biggest weekly gain since late June.

Verizon Communications Inc fell 5.27% as its profit fell 23% and the carrier beat estimates for wireless subscriber additions.

American Express (AXP.N) It fell 5.66% after it devoted larger provisions to preparing for potential defaults as the economic downturn approaches.

Schlumberger (SLB.N) It rose 9.2%, sending the S&P 500 up 2.2%, after reporting higher-than-expected quarterly earnings.

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Advance issues outnumbered losers by 1.62 to 1 on the New York Stock Exchange and by 1.39 to 1 on the Nasdaq.

The S&P recorded seven new 52-week highs and 32 new lows, while the Nasdaq recorded 25 new highs and 252 new lows.

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Additional reporting by Shreyachi Sanyal and Ankika Biswas in Bengaluru; Additional reporting by Bansari Mayor Kamdar. Editing by Anil de Silva, Arun Koyor and Shunak Dasgupta

Our criteria: Thomson Reuters Trust Principles.