Dusseldorf, New York Wall Street ended trading with losses following the US Federal Reserve’s interest rate decision. The Federal Reserve Bank’s (Fed) hike of 0.25 points in interest rates was in line with analysts’ expectations. The US stock exchanges were initially able to hold their gains, but then gave way during the press conference by Fed Chair Jerome Powell. Powell said interest rates might be at a high enough level, or at least not far off. At the same time, it dampened market expectations of interest rate cuts in the near future.
The Dow Jones index of standard values lost almost 0.8 percent and closed at 33,414 points. The broader S&P 500 was down 0.7 percent at 4,090 points. The index of the technology exchange Nasdaq also lost value. It closed 0.5 percent lower at 12,025 points.
Shares in regional banks such as PacWest and Western Alliance recovered somewhat from their recent sell-off this morning local time but failed to hold on to those gains. PacWest shares rose by almost 14 percent at one point, but turned negative again and closed 1.98 percent in the red. In the meantime, after-hours trading, the values collapsed by a further 55 percent. Western Alliance initially climbed about six percent, but closed 4.4 percent down. In after-hours trading, the price fell further by around 25 percent.
In the chip sector, a disappointing forecast from AMD spoiled sentiment. The titles lost more than nine percent. The chip manufacturer AMD expects sales of around 5.3 billion dollars for the current quarter and was therefore somewhat below the expectations of the analysts. The Californian company announced that the reason was the weakening PC business.
A forecast cut also sent Estee Lauder shares plummeting. The papers of the US cosmetics company fell by 17.34 percent. The company expects sales to fall between 10% and 12% in 2023, compared to its previous forecast of a fall of between 5% and 7%.
Adjusted earnings per share should also halve. The group had previously assumed a decline of 27 to 29 percent. The reason for the bleaker outlook is an unexpectedly slow recovery in travel retail in Asia despite the easing of corona restrictions.
Investors should pay attention to the leading US index S&P 500, which is currently testing the key technical chart mark of 4200 points. According to Jörg Scherer, technical analyst at HSBC Germany, overcoming this mark would complete a strategic trend reversal.
“Their arithmetical connection potential can be estimated at around 700 points and would even allow a run up to the previous all-time high of 4819 points,” he explains. “In the event of an outbreak, it should be ‘buy in May’.” In order not to lose this current opportunity, it is important not to fall below the 50-day line, which is currently at 4036 points.
Look at other individual values:
Eli Lilly: The drug company’s stock rose 6.68 percent. Clinical trial data have shown that the company’s donanemab preparation slows the progression of Alzheimer’s disease.
Chegg: Shares of the online bookseller rose 12.25 percent after falling as much as 48 percent the previous day. The company expressed concern at its annual press conference about the rise of artificial intelligence as a threat to its core business. CEO Dan Rosensweig also said the panic that sent the stock price plummeting was “extremely overblown.”
Generac: The power technology company’s stock gained 11.61 percent after quarterly results beat analysts’ expectations. According to StreetAccount, Generac reported adjusted earnings of 63 cents per share versus 48 cents expected.
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