For the first month of the year, the markets seemed very resilient until the final trading day, when the indices gave up .8% on the Dow, 1.6% on the S&P 500 and 2.23% on the NASDAQ. The 10-year Treasury dipped just below 4% on the final trading day. More about that in a minute.
For the month of January, the S&P 500 led the pack with a 1.6% advance, while the Dow climbed 1.2%. The Nasdaq couldn’t overcome poor showings by Tesla and Apple, logged a 1% monthly gain.
Many on Wall Street on Wednesday once again turned their attention toward Washington, where central bankers kept interest rates steady, as expected. But this Fed Day was about future Fed days, with bond and stock investors searching for hints about when the central bank might start cutting rates and in turn lower borrowing costs for businesses and consumers across the country.
The Federal Reserve has set the table for rate cuts starting in June, according to David Kelly, chief global strategist for JPMorgan Asset Management.
“It sounds to me like June, September, December is what they are thinking — three rate cuts this year — provided the economy keeps growing,” he said in an interview with CNBC following the release of the Federal Reserve’s statement.
“There doesn’t seem to be, at the moment, a sign that the U.S. economy is going to keel over and fall into recession any time soon,” he added. “Until they see greater damage — or potential damage — to the economy given to the huge run up in the markets we’ve seen, they just see the balance of risk more being on the side of inflation being sticky than the economy falling into recession.”
Oil prices in January traded in the green for the first time since September, propelled by fears of wider conflict in the Middle East and winter storms that shut production across swaths of oil fields in North Dakota and Texas. Benchmark U.S. crude finished the month 5.9% higher at $75.85 a barrel.
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