Wall Street main indexes jump as hope of an interest rate hike pause increases.
Traders’ optimism about the percentage of an interest rate hike pause just rose from the previous 50% to above the 65% chance. The increase in the interest rate hike pause rose after Federal Reserve Chairman Jerome Powell said that they would proceed carefully with their policy.
In March 2022, the U.S. Federal Reserve and the central banks implemented the longest interest rate hike series in the history of the country. In the longest fight against inflation, we dropped the all-time high 65-year-old inflation rate to a target point of 2–3%.
Still, this in turn has affected tech stocks, Nasdaq composite profits, and manufacturing activities. However, after being down by more than 60%, 80% of tech stocks recovered their last-year losses and retrieved more than 70% of their stock price.
All hopes of an interest rate hike pause depend on the Fed meeting and the economic data that federal officials use to determine their monetary decisions.
On the other hand, Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, had something to say about recent news. Chris said, “”Powell continued to leave optionality open for the Fed in terms of future rate hikes, but did nothing to change the narrative that the Fed will keep rates unchanged at their next meeting and is relatively likely to keep them unchanged for the rest of this year as well.”
Therefore, despite maintaining a flexible stance regarding future interest rate increases, Powell did not alter the prevailing expectation that the Fed is inclined to keep rates steady at their upcoming meeting and throughout the remainder of the year. Powell left room for adjustments while reaffirming the likelihood of maintaining current interest rates in the near term.
Meanwhile, Wall Street main indexes climbed higher due to increasing hopes of an interest rate hike pause. The S&P 500 benchmark fell by 0.12%, the Nasdaq rose by 0.2%, and the Dow Jones industrial average rose by 0.07%.
Moving to the technology sector, After releasing its Q3 results slightly below estimates, Tesla (TSLA) experienced a modest initial after-hours uptick on Wednesday. The company’s margins continued to contract. Tesla’s deliveries declined by 6.7% sequentially due to planned factory upgrades, even though they still anticipate achieving their full-year target of 1.8 million vehicle deliveries. However, the stock later slid by 4.2% when CEO Elon Musk attempted to temper expectations regarding the Cybertruck.
As for Netflix, after posting the Q3 profit, the company’s stock price jumped by 12%, driving tech stock to the roof. The company significantly exceeded expectations by gaining 8.76 million global paid subscribers, reaching 247.15 million memberships, surpassing the anticipated 244.41 million. Netflix attributed this surge to factors like “paid sharing,” consistent programming, and global streaming expansion. According to Cestrian Capital Research, the company’s positive outlook, predicting increased revenue and improved margins, indicates the potential for scaling and generating greater revenue from its content assets.