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Stock market news live updates: Stocks sink after Fed decision, S&P 500 posts worst session in three months

Emily McCormick
·8-min read

Stocks sank Wednesday as investors digested the Federal Open Market Committee’s (FOMC) January monetary policy decision and latest batch of corporate earnings results.

[Click here to read what’s moving markets heading into Thursday, Jan. 28]

In its January policy statement, the Federal Reserve underscored the recent deterioration in economic data amid the ongoing pandemic, saying that, “The pace of the recovery in economic activity and employment has moderated in recent months. This language was updated from the Fed’s December statement, which simply noted that economic activity and employment were still “well below their levels” from the start of 2020.

As expected, the central bank kept benchmark interest rates unchanged at their near-zero level, and recommitted to leaving rates untouched until labor market conditions and inflation trends achieved the Fed’s targets. The Fed also said it would continue its crisis-era asset purchase program at the current rate of $120 billion per month.

“The Fed didn’t rock the boat. Growth is slowing, but not slow enough to trigger any changes to policy,” Ryan Detrick, chief market strategist for LPL Financial, said in an email. “In the end, what was expected to be a non-event was exactly that.”

The S&P 500 traded lower by 2.5%, pulling back from the all-time high it reached only a day earlier. The Dow also sank by more than 2%, as shares of Boeing (BA) dropped after posting a record annual loss and booking additional charges over its delayed 777X aircraft roll-out.

The Nasdaq dipped even as some heavily weighted tech stocks pushed higher. Shares of Microsoft (MSFT) jumped after the company posted fiscal second quarter results that handily topped expectations late Tuesday, driven by accelerating growth in its key cloud and personal computing businesses. But other quarterly results failed to impress Wall Street: Shares of Starbucks (SBUX) fell after the company’s quarterly comparable same-store sales growth declined more than expected due to lingering impacts of the pandemic. Companies including Facebook (FB), Apple (AAPL) and Tesla (TSLA) are set to report quarterly results on Wednesday.

Elsewhere, shares of GameStop (GME) more than doubled after closing higher by 93% a day earlier earlier. The stock’s market capitalization sailed to more than $10 billion as a multitude of traders on one of Reddit’s popular stock forums banded together to clash with Wall Street short-sellers yet again. Shares of other heavily shorted stocks including Express (EXPR) and Bed Bath & Beyond (BBBY) also soared. AMC (AMC) shares surged as much as 310% on Wednesday to hit the highest level since 2018 and erase the stock’s pandemic-era losses.

4:05 p.m. ET: S&P 500 drops 2.6% for worst session since October, after Fed underscores moderating economic growth

Here were the main moves in markets as of 4:05 p.m. ET:

  • S&P 500 (^GSPC): -98.84 (-2.57%) to 3,750.78

  • Dow (^DJI): -633.87 (-2.05%) to 30,303.17

  • Nasdaq (^IXIC): -355.47 (-2.61%) to 13,270.60

  • Crude (CL=F): +$0.05 (+0.10%) to $52.66 a barrel

  • Gold (GC=F): -$10.00 (-0.54%) to $1,840.90 per ounce

  • 10-year Treasury (^TNX): -2.6 bps to yield 1.0140%

2:54 p.m. ET: Powell says coming months’ inflation will be ‘transient’

Federal Reserve Chair Jerome Powell, during his press conference Wednesday afternoon, said he expected inflation to rise in the coming months when compared to the highly depressed levels of last year, at the height of the pandemic-related shutdowns.

“We’ll see measured 12 months inflation move up a few tenths,” Powell said. “This is just base effects and that’s a transient thing that we think will pass.”

“Expect us to wait and see and not react If we see small, and what we would be very likely to view as transient, inflation,” he added.

In its monetary policy statement Wednesday, the Fed reaffirmed that its goal was to “achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.”

2:07 p.m. ET: Indexes remain sharply lower after Fed decision

The three major indexes responded mutedly to the Federal Reserve’s monetary policy statement, with each of the S&P 500, Dow and Nasdaq still off by more than 1%. The decision yielded no changes, as expected, but did include new language pointing to the deteriorating trends in economic activity as of late.

The S&P 500 fell 1.7%, led by declines in the communication services, financials and healthcare sectors. Boeing, Disney and Merck lagged in the Dow, offsetting strong gains in 3M and Walgreens.

12:40 p.m. ET: Stocks hold lower ahead of Fed decision

Here’s where markets were trading as of 12:40 p.m. ET:

  • S&P 500 (^GSPC): -61.09 (-1.59%) to 3,788.53

  • Dow (^DJI): -335.82 (-1.15%) to 30,581.22

  • Nasdaq (^IXIC): -164.91 (-1.21%) to 13,462.02

  • Crude (CL=F): +$0.49 (+0.93%) to $53.10 a barrel

  • Gold (GC=F): -$7.50 (-0.41%) to $1,843.40 per ounce

  • 10-year Treasury (^TNX): -2.9 bps to yield 1.011%

10:07 a.m. ET: Boeing shares weigh on Dow after aircraft-maker reports a record annual loss

Boeing (BA) posted fourth-quarter results that reflected ongoing negative impacts from the coronavirus pandemic and 737 Max groundings.

The company’s core loss per share came out to $15.25, or much wider than the $2.33 loss per share reported in the same quarter last year. Revenue of $15.3 billion sank 15% over last year. Boeing’s net losses in the fourth quarter were $8.4 billion, bringing the company’s full-year net loss to a record $11.9 billion.

During an interview with CNBC Wednesday morning, CEO David Calhoun said he believed a “robust” recovery in travel demand would take place beginning in the mid- to late-summer period this year.

Boeing also reported Wednesday that its twin-aisle 777X aircraft would not begin being delivered until late 2023, or three years later than originally scheduled. The delay generated a $6.5 billion pre-tax charge to Boeing, as low initial production rates weighed on the launch.

9:30 a.m. ET: Stocks open lower, Dow drops 300+ points, or 1%

Here’s where markets were trading shortly after the opening bell:

  • S&P 500 (^GSPC): -43.25 (-1.12%) to 3,806.37

  • Dow (^DJI): -335.18 (-1.08%) to 30,601.86

  • Nasdaq (^IXIC): -178.10 (-1.31%) to 13,447.96

  • Crude (CL=F): -$0.12 (-0.23%) to $52.49 a barrel

  • Gold (GC=F): -$12.20 (-0.66%) to $1,838.70 per ounce

  • 10-year Treasury (^TNX): -3.2 bps to yield 1.008%

8:30 a.m. ET: Durable goods orders increased far less than expected in December

Orders for U.S. manufactured goods intended to last three years or longer slowed more than expected in December, as slumping transportation goods orders weighed on results.

Durable goods orders rose just 0.2% in December over November, the Commerce Department said Wednesday, following an upwardly revised increase of 1.2% in November. Consensus economists were looking for durable goods orders to rise by 1.0%. Still, orders rose for an eighth straight month.

Excluding transportation orders, however, durable goods orders were up 0.7% to outpace estimates for a rise of 0.5%. New orders for non-defense aircraft and parts slumped more than 50% in December over November.

Non-defense capital goods orders, excluding aircraft, increased by a better than expected 0.6%, following an upwardly revised 1.0% rise in November. This metric is closely watched as a proxy for business capital expenditures, and has risen for eight consecutive months.

7:20 a.m. ET Wednesday: Stock futures point to a lower open

Here were the main moves in markets, as of 7:20 a.m. ET Wednesday:

  • S&P 500 futures (ES=F): 3,810.5, down 32 points or 0.83%

  • Dow futures (YM=F): 30,609.00, down 233 points or 0.76%

  • Nasdaq futures (NQ=F): 13,462.25, down 23.25 points or 0.17%

  • Crude (CL=F): +$0.01 (+0.02%) to $52.62 a barrel

  • Gold (GC=F): -$15.00 (-0.81%) to $1,835.90 per ounce

  • 10-year Treasury (^TNX): -1.4 bps to yield 1.026%

6:02 p.m. ET Tuesday: Stock futures open higher

Here were the main moves in markets, as of 6:02 p.m. ET Tuesday:

  • S&P 500 futures (ES=F): 3,849.5, up 7 points or 0.18%

  • Dow futures (YM=F): 30,870.00, up 28 points or 0.09%

  • Nasdaq futures (NQ=F): 13,566.25, up 80.75 points or 0.6%

A trader stands outside the New York Stock Exchange in the financial district during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., September 9, 2020. Picture taken September 9, 2020.  REUTERS/Carlo Allegri
A trader stands outside the New York Stock Exchange in the financial district during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., September 9, 2020. Picture taken September 9, 2020. REUTERS/Carlo Allegri

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