Julius Shakari, from California in full PPE gear, takes photos with his friend in front of the Charging Bull, sometimes referred to as the Wall Street Bull, a bronze sculpture in the Financial District of Manhattan, New York, May 19, 2020.
Timothy A. Clary | AFP | Getty Images
US stock futures remained flat on Wednesday night as traders digested the Federal Reserve̵
The Dow Jones Industrial Average traded just below the flatline. The S&P 500 and Nasdaq 100 futures have also changed little.
Federal Open Market Committee members indicated that the US overnight rate could remain pegged at the zero limit until 2023 as the central bank tries to stimulate inflation. In a statement, the committee said: “With inflation steadily flowing below this long-term target, the Committee will aim to achieve inflation moderately above 2% for some time, so that inflation reaches an average of 2% over time “.
Fed Chairman Jerome Powell reiterated this position at a press conference, saying that easy monetary policy will remain “until these results, including maximum employment, are achieved.”
He also said parts of the US economy will continue to struggle unless lawmakers move in with further fiscal stimulus. That comment from Powell came as lawmakers struggle to reach agreement on a new coronavirus aid bill. On Wednesday, White House Chief of Staff Mark Meadows said he was optimistic that a deal could be reached.
Typically, the outlook for lower rates over an extended period of time stimulates stock buying. However, this was not the case on Wednesday.
The S&P 500 and Nasdaq both closed lower and the Dow closed its session high well. Big Tech dragged the S&P 500 and Nasdaq lower, with Apple, Facebook and Microsoft all closing lower.
“The major indices have returned to their short-term trading range following the Fed announcements, confirming the bulls are not out of the woods yet,” said Ken Berman, founder of Gorilla Trades. “While there was nothing scary about today’s Fed announcements, stocks reacted in a bearish way, especially in the tech sector.”
On Thursday, Wall Street will take the latest look at weekly unemployment claims in the United States. US housing startup data is also ready for release.
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