U.S. Stocks Wobble Amid Higher-for-Longer Rate Worries

Barry Adams
19 Mar, 2024
New York City

Stocks turned lower in Tuesday's trading as investors awaited rate decisions from the Federal Reserve. 

The S&P 500 index and the Nasdaq Composite declined 0.3%, and investors booked profits in hot tech stocks. 

The Federal Reserve is set to kick off its two-day policy meeting amid growing worries that policymakers may be influenced by the recent inflation updates, and keep higher rates for longer.  

Consumer and wholesale price inflation has cooled over the last fifteen months, and inflation is still above the 2% target rate set by policymakers despite eleven rate hikes. 

Moreover, home prices are still rising in most urban markets faster than wage gains, making home ownership a distant possibility for first-time home buyers. 

 

U.S. Housing Starts Jump In February

U.S. housing starts and permits increased in February, the Commerce Department reported Tuesday.

Low home inventories are forcing more and more buyers to buy new homes as buyers struggle with elevated mortgage rates and home affordability. 

Seasonally adjusted privately owned housing starts rose to 1.521 million, an increase of 10.7% from January and 5.9% from a year ago. 

Single-family housing starts in February were at a rate of 1.129 million, an increase of 11.6% above the revised January level of 1.01 million. T

Building permits increased 1.9% from the previous month and 2.4% from a year ago to a total of 1.518 million. 

Single-family authorizations in February totaled 1.031 million, an increase of 1.0% above the revised January level of 1.021 million. 

Authorizations of multi-family buildings with five units or more were at a rate of 429,000 in February.

Housing completions surged 19.7% from January and increased 9.7% from a year ago to 1.73 million. 

Single-family housing completions in February totaled 1,072,000, an increase of 20.2% above the revised January rate of 892,000. 

The February rate for completions of buildings with multi-family units was 644,000.

 

U.S. Indexes and Yields

The S&P 500 index increased 0.8% to 5,157.22, and the Nasdaq Composite rose 0.9% to 16,132.21. 

The yield on 2-year Treasury notes decreased to 4.70%, 10-year Treasury notes inched up to 4.30%, and 30-year Treasury bonds edged down to 4.44%.

WTI crude oil increased $0.02 to $82.75 a barrel, and natural gas prices increased 3 cents to $1.74 a thermal unit.

Gold decreased by $2.66 to $2,157.77 an ounce, and silver rose 1 cent to $25.15. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.88.

In overseas trading, European markets hovered near record highs, and the Nikkei in Japan traded volatile after the Bank of Japan ended its negative interest rate policy and raised rates for the first time after 17 years. 

 

U.S. Stock Movers

Nvidia declined 1.9% to $867.99 after the company released its fastest AI graphics processor, dubbed Blackwell, at its first annual developer's GTC conference. 

The first Blackwell chip, called BG200, is scheduled to ship later in the year and promises to sharply increase processing power for artificial applications and accelerate training of AI models and tools. 

AMD declined 4.6% to $181.99 after Nvidia's announcement of a new chip. 

Super Micro Computer declined 10.2% to $898.57 after the company announced its plan to sell as many as 2 million shares. 

Super Micro stock has soared more than 250% this year following the enthusiasm for artificial intelligence. 

Super Micro is the preferred vendor for building servers using Nvidia's chips for artificial intelligence applications. 

Coinbase Global declined 2.2% to $227.04 after bitcoin prices dropped as much as 6.2% in early trading, extending losses from the peak above $73,000 reached last week. 

Unilever PLC increased 2.5% to $49.77 after the company announced its plans to spin off its ice cream division, which includes Ben & Jerry's and Magnum brands. 

The company also added that it plans to implement a productivity program to accelerate sales, improve its cost structure, and eliminate as many as 7,500 jobs.