Wall Street closed lower after Fed concerns

(APMF IN-DOW JONES) US stock markets closed lower on Wednesday after Federal Reserve meeting minutes showed there were major concerns about persistent inflation.

The Standard & Poor’s 500 index closed 0.3 percent lower at 5,307.01 points, the Nasdaq index fell 0.2 percent to 16,801.54 points, and the Dow Jones index lost 0.5 percent to 39,671.04 points.

Wednesday was the day of the Fed’s meeting minutes and Nvidia’s numbers, which were released hours later.

Minutes of the Fed’s April 30-May 1 monetary policy meeting showed that members are concerned about the lack of progress toward lowering inflation in recent months. The minutes also showed that “several participants” discussed their willingness to raise interest rates if inflation did not fall further toward the 2 percent target.

Committee members also expressed concern about consumers turning to riskier forms of financing to cover their expenses as inflationary pressures continue. “Many participants noted that the finances of low- and middle-income households are under increasing pressure, which these participants viewed as a downside risk to consumption expectations,” the minutes said. They pointed to the increased use of credit cards and buy-now-pay-later services, as well as an increase in late payment rates for some types of consumer loans.

People were largely optimistic about growth prospects, although they expected some moderation this year. They also said they expect inflation to eventually return to the 2% target, but are becoming more ambiguous about how long that will take and how much higher interest rates will impact the process during that period.

It also emerged on Wednesday that US existing home sales fell in April. On a monthly basis, sales fell by 1.9 percent to 4.14 million homes year-on-year. Economists had previously expected a 1.4 percent increase to 4.25 million homes sold. The average selling price was $407,600. This represents an increase of 5.7 percent year-on-year.

Oil prices fell, partly due to increased oil inventories in the United States. The price of a barrel of West Texas Intermediate crude fell by 1.4% to reach $77.57.

The ten-year interest rate in the United States rose slightly to 4.43 percent. EUR/USD fell slightly to 1.0820.

The risers and the fallers

Nvidia shares closed 0.5 percent lower before the numbers were announced. Analysts expect revenue to nearly quadruple to $24.6 billion in the latest quarter, while earnings are expected to increase fivefold to $5.60 per share. The group itself was aiming to achieve sales ranging from $23.5 to $24.5 billion.

The target fell 8.0 percent after disappointing earnings numbers. The retailer said it is about to end a string of similar sales declines that have continued for years.

Toll Brothers shares fell 8.5 percent even as the luxury home builder reported better-than-expected quarterly results.

Tesla shares fell 3.5 percent after the company’s sales in Europe fell to the lowest level in 15 months, according to a Bloomberg report.

ViaSat stock fell nearly 16.5 percent. The satellite communications company posted a loss in the latest quarter, while revenue rose 73 percent, driven by the contribution of its recent Inmarsat acquisition.

Urban Outfitters stock fell 4.6 percent after earnings. The company reported adjusted earnings of $0.69 per share during the quarter, beating analysts’ expectations of $0.53 per share. Sales rose 7.8 percent to $1.2 billion.

Source: ABM Financial News

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