Wednesday marked a departure from the bullish sentiment that had been driving Wall Street in recent sessions, as major indices experienced slight declines during midday trading in New York.
The shift in mood was triggered by hawkish remarks from Minneapolis Fed President Neel Kashkari and Boston Fed President Susan Collins. Their comments raised concerns among investors about potential delays in rate cuts, as the prospect of enduring higher interest rates gained traction.
Kashkari suggested that the Federal Reserve may need to maintain borrowing costs at current levels for an extended period, potentially throughout the year. He did not rule out the possibility of rate hikes if inflation remained stubbornly high at 3%. Similarly, Collins echoed these sentiments, indicating that a slowdown in economic growth would be necessary to bring inflation closer to the Fed’s 2% target. She cautioned against premature rate cuts.
In response to these remarks, major indices showed slight declines. The S&P 500, represented by the SPDR S&P 500 ETF Trust (NYSE:SPY), edged down by 0.2%. Despite the decline, the S&P 500 was on track for its fifth consecutive day of gains, which would mark its longest winning streak since late January. The Nasdaq 100 also slipped by 0.2%, while blue-chip stocks in the Dow Jones Industrial Average managed to marginally avoid losses. However, small-cap stocks represented by the Russell 2000 Index were the laggards of the day, declining by 0.9%.
In the commodities market, the Energy Information Administration’s report of a decline in crude oil inventories last week led to a modest 0.6% increase in West Texas Intermediate prices. Gold prices remained steady, while silver experienced a modest uptick of 0.6%. Bitcoin (CRYPTO: BTC) traded flat at $62,300.
Among individual stocks, Uber Technologies Inc. (NASDAQ:UBER) was a notable mover, falling over 9% after the company missed earnings expectations and reported a loss in Q1. Other stocks reacting to earnings included Shopify Inc. (NYSE:SHOP), down 19%, Tripadvisor.com (NASDAQ:TRIP), down 29%, Kyndril Holdings (NYSE:KD), up 23%, and Arista Networks, Inc. (NYSE:ANET), up 6%. After-hours earnings reports were expected from companies such as Airbnb, Inc. (NASDAQ:ABNB), AppLovin Corporation (NASDAQ:APP), Beyond Meat, Inc. (NASDAQ:BYND), and Robinhood Markets, Inc. (NASDAQ:HOOD), among others.
Overall, Wednesday’s market performance reflected a cautious stance among investors amid concerns about potential shifts in monetary policy and earnings outcomes from major companies.
