Wall Street closed lower on Thursday as market participants turned cautious ahead of the Fed’s December meeting. The Nasdaq Composite, the S&P 500 and the Dow ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1.7%, or 797.60 points, to close at 47,457.22. Twenty-two components of the 30-stock index ended in negative territory, and eight ended in the positive.
The tech-heavy Nasdaq Composite declined 2.3%, to close at 22,870.36.
The S&P 500 lost 1.7% to end at 6,737.49. Out of the 11 broad sectors of the broad-market index, ten 10 ended in negative territory, while one was in positive territory. The Consumer Discretionary Select Sector SPDR (XLY), the Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) declined 2.5%, 2.5% and 1.6%, respectively, while the Energy Select Sector SPDR (XLE) rose 0.3%.
The major loser of the S&P 500 Index was Robinhood Markets, Inc. HOOD after its shares fell 8.6%. Robinhood currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The fear gauge, the CBOE Volatility Index (VIX), increased by 20% to 14.22. A total of 20.8 billion shares were traded on Thursday, higher than the last 20-session average of 20.3 billion. The S&P 500 posted 17 new 52-week highs and seven new lows, and the Nasdaq Composite recorded 56 new highs and 230 new lows.
Fed’s December Rate Cut in Doubt
Uncertainty surrounding a potential Federal Reserve rate cut in December has intensified, with several policymakers signaling hesitation as inflation remains elevated and the labor market continues to show resilience. After two rate cuts earlier this year, officials are expressing concern that further easing may not be warranted without any clearer evidence of slowing price pressures or weakening job conditions.
Market expectations have shifted sharply. As per CME Group's FedWatch tool, interest rates are predicted to have a 47.8% chance of a cut at the Dec. 9–-10 meeting, down from earlier levels near of 52.2%, reflecting growing doubt inside the central bank.
With inflation still above the Fed’s 2% target and policymakers split on the path ahead, the December meeting is shaping up to be one of the most finely balanced of the year.
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Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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