Stocks erase gains amid tech rout, Powell remarks
Stocks fell amid a sell-off in technology companies and after Federal Reserve Chairman Jerome Powell's remarks that he's not sure if the faster-than-expected economic recovery will continue.
Earlier Wednesday, equities jumped to session highs after the Fed left rates near zero and signaled it would hold them there through at least 2023. Stocks wiped out gains amid a slide in giants such Adobe, Apple and Facebook. Treasurys fell after Powell stopped short of offering new specifics on the Fed's approach to the monthly bond purchases that have buttressed markets, saying the program could be adjusted "to make it smaller, make it larger" or target different ares of the yield curve.
Fed officials have stressed in recent weeks that the U.S. recovery is highly dependent on the nation's ability to better control the coronavirus, and that further fiscal stimulus is likely needed to support jobs and incomes. "The recovery has progressed more quickly than generally expected," Powell said, while cautioning that "the path ahead remains highly uncertain." It was the Federal Open Market Committee's final scheduled meeting before the U.S. presidential election on Nov. 3.
"Rates are likely to remain at zero through 2023, but this does not alleviate the need for additional fiscal support," said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. "The ball is now in Washington's court."
The White House strongly signaled Wednesday that it is willing to increase its offer in talks with Democrats, and that Senate Republicans should go along to seal a stimulus deal in the next week to 10 days.
These are some of the main moves in markets:
Stocks
--The S&P 500 Index fell 0.5% as of 4 p.m. EDT.
--The Stoxx Europe 600 Index increased 0.6%.
--The MSCI Asia Pacific Index climbed 0.5%.
Currencies
--The Bloomberg Dollar Spot Index fell 0.1%.
--The euro declined 0.4% to $1.18.
--The Japanese yen appreciated 0.4% to 104.99 per dollar.
Bonds
--The yield on 10-year Treasurys gained one basis point to 0.69%.
--Germany's 10-year yield fell one basis point to -0.48%.
--Britain's 10-year yield decreased one basis point to 0.211%.
Commodities
--The Bloomberg Commodity Index increased 0.7%.
--West Texas Intermediate crude jumped 5% to $40.18 a barrel.
--Gold strengthened 0.2% to $1,958.16 an ounce.
