Earnings In Focus After Fed's Decision to Hold Rates Steady

Barry Adams
02 May, 2024
New York City

Benchmark indexes on Wall Street edged higher after investors shifted their attention to corporate quarterly results and key economic data releases. 

The S&P 500 index and the Nasdaq Composite turned higher in early trading as investors reviewed the latest comments from Federal Reserve Chair Jerome Powell. 

The U.S. Federal Reserve held steady in its policy rate range between 5.25% and 5.50%, as widely anticipated by most market participants. 

The Federal Reserve also noted that inflation is still too high but added that it is unlikely that the next policy move will be a rate increase. 

Fed Chairman Jerome Powell said that the central bank is prepared to keep rates high as long as needed until it gains greater confidence that inflation is on the path of its target rate of 2%. 

The Federal Reserve also announced its plans to slow down its quantitative tightening starting June 1. The move is likely to contribute to lowering interest rates and ease the liquidity crunch in the financial system. 

The central bank plans to reduce its monthly sale of Treasury securities to $25 billion from the current target of up to $60 billion beginning June 1st. 

The Federal Reserve is holding about $7.4 trillion of Treasury securities on its balance sheet, and the Fed has been shrinking its balance sheet after it expanded to $9 trillion at the start of 2022 from pre-pandemic $4 trillion. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.6% to 5,046.63, and the Nasdaq Composite rose 0.7% to 15,672,89. 

The yield on 2-year Treasury notes edged higher to 4.95%, 10-year Treasury notes inched lower to 4.61%, and 30-year Treasury bonds edged lower to 4.75%.

WTI crude oil increased $0.72 to $79.72 a barrel, and natural gas prices increased 4 cents to $1.97 a thermal unit.

Gold increased by $23.02 to $2,109.15 an ounce, and silver fell 47 cents to $26.21. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.70.

 

U.S. Stock Movers

DoorDash plunged 9.9% to $114.80 after the food delivery company reported a wider-than-expected loss in its latest quarter. 

Carvana soared 35% to $118.0 after the automotive retailer reported higher-than-expected revenue in the first quarter. 

eBay Inc. declined 3.8% to $49.11 after the online marketplace operator estimated weaker-than-expected revenue in the current quarter. 

Qualcomm increased 5.2% to $172.78 after the advanced chipmaker reported better-than-expected earnings in its latest quarter and issued strong guidance for the current quarter. 

Moderna rose 1.9% to $113.67 after the vaccine maker reported a smaller-than-expected quarterly loss in its latest quarter after the company trimmed operating costs. 

Wayfair Inc. advanced 7.5% to $54.31 after the online furniture retailer reported a narrower loss in its latest quarter, partly driven by layoffs. 

Peloton Interactive increased 13% to $3.61 after the company announced its plans to lay off 15% of its staff, and chief executive officer Barry McCarthy will be stepping down. 

McCarthy will act as a strategic adviser to the company through the end of the year, and chairperson Karen Boone and director Chris Bruzzo will assume the roles of interim co-CEO.