Chuck Mikolajczak
NEW YORK (Reuters) – Global stock indexes fell on Wednesday while the dollar fell against a basket of peers after the Federal Reserve left interest rates unchanged and indicated it was still leaning towards a possible rate cut. and following the release of a series of US economic data.
However, the Fed has taken note of recent disappointing inflation figures and suggested that progress towards greater balance in the economy may be stalling.
The central bank also announced plans to slow the pace of its balance sheet contraction, after spending much of the start of the year warning of such a shift.
Sam Stovall, chief investment strategist at CFRA Research in New York, said the Fed’s policy statement contained no big surprises.
“This matter is being carefully studied, and if there is any reaction today, up or down, it will be the result of the answers during the press conference,” he said.
He noted the release of employment data later this week, which will be closely watched. “But I think there are a few things that will hold back the market,” Stovall said. “One is the persistence of inflation, actual inflation numbers, concerns that we are seeing slower economic growth based on the latest GDP numbers combined with PMI data, and consumer confidence, which has been weaker than expected.”
On Wall Street, the index edged slightly lower in choppy trading following the Fed’s policy announcement after all major indexes ended April with their first monthly decline since October.
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The S&P 500 rose 172.78 points, or 0.46%, to 37,986.53, the S&P 500 lost 3.66 points, or 0.07%, to 5,032.03, and gained 0.38 points, or 0.00%, up to 15,658.20.
Earlier, data from the ADP Employment report showed that US private sector payrolls increased more than expected in April, while data for the previous month was revised upward.
But a separate report from the Bureau of Labor Statistics, the Job Openings and Labor Turnover Study (JOLTS), showed that job openings in the U.S. fell to a three-year low in March while the number of people quitting their jobs fell, a sign of weakening labor pressures. relationships. market conditions that could potentially help the Fed fight inflation.
Other data from the Institute for Supply Management pointed to continued sluggishness in U.S. manufacturing, which contracted in April as orders fell after a brief rise in the previous month.
The data comes ahead of the government’s key jobs report on Friday.
Markets have lowered expectations for the timing and extent of central bank rate cuts this year as inflation appears resilient and the labor market remains on solid footing.
The MSCI index of shares worldwide fell 0.94 points, or 0.12%, to 755.67.
Investors were also hit by a flood of US corporate earnings, with Amazon.com (NASDAQ:) up about 3% after quarterly results, helping lift the Dow Jones Industrial Average.
Following the Fed’s statement, the rate fell 0.21% to 106.10 after earlier hitting 106.49, its highest level since April 16, with the euro rising 0.22% to $1.0688.
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Benchmark 10-year U.S. bond yields fell 5.2 basis points to 4.632% from 4.684% late Tuesday, while yields, which typically move in lockstep with interest rate expectations, fell 4.8 basis points to 4. .9977%.
European bond markets were closed for the May 1 holiday, as were most stock markets in Europe, as well as China, Hong Kong and much of Asia.
Stock markets that traded closed 0.28% lower and closed 0.34% lower.
Oil prices fell for a third day in a row as hopes for a ceasefire in the Middle East grew and continued to decline following an EIA report on US oil storage.
lost 3.54% to $79.03 a barrel and fell to $83.49 a barrel, down 3.29% on the day.