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Wall Street continues the FOMC sentiment, ready for NFPs

Wall Street continues the FOMC sentiment with stock sell off. Dollar gets back some of its losses.

The S&P 500 fell on Thursday, led by a drop in tech stocks caused by rising Treasury yields. This happened just one day after the Federal Reserve’s December minutes showed that more rate hikes were coming.

Esther George, president of the Kansas City Federal Reserve Bank, said on Thursday that the Fed still needs to do something about high inflation. She also said that the central bank would keep rates the same until 2024, which is in line with the FOMC’s hawkish position.

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The S&P 500 dropped 1.25%, the Dow Jones Industrial Average dropped 1.1%, or 370 points, and the Nasdaq Composite fell 1.5%.

Microsoft led the sell off again for the second day in a row after UBS raised concerns about slowing growth in Microsoft’s cloud and office businesses the day before. The tech giant lost 3.13% by the end of the day.

Amazon lost almost 2.5% of its value after the e-commerce giant said it would cut a little more than 18,000 jobs to save money. The move came after the company warned in December that there would be “more role reductions” in early 2023. Tesla closed in the red again after a green day. Closing almost 3% down.

Dollar takes the lead based on jobs data

The US dollar went up after the US government released data about jobs. The ADP survey on private job creation showed an increase of 235K in December, which was much better than expected. At the same time, Initial Jobless Claims for the last week of December fell to 204K, which was better than the 225K that the market was expecting.

Back in the red for the week, AUD/USD settled at around 0.6753 or 1.17%. EUR/USD was unable to break the 1.06 mark and fell back to 1.052 by 0.75%. The yen was also unable to hold back the dollar’s rise and USD/JPY sounded the bell at 133.38 with a 0.6%rise.

Oil holds price above $70, gas jumps off a cliff

Oil prices went up by about 1.3% on Thursday, after falling for the first two days of the year by the most in 30 years. The day was marked by healthy volatility.

US data showing lower fuel inventories helped, but worries about the economy limited gains. The price of a barrel of Brent crude futures went up by 85 cents, or 1.1%, to $78.69. The price of US West Texas Intermediate crude went up by 83 cents, or 1.2%, to $73.67.

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The EIA data showed that distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels in the past week. This was more than the expected drop of 396,000 barrels.

Gas on the other hand, was back below the key $4 support level. The February Henry Hub contract gas bulls have been trying to hold on since the beginning of the week. The price of gas for February was $3.691 per mmBtu (metric million British thermal units). This was a drop of 48.1 cents, or 11.5%, on the day. Since the beginning of January, Henry Hub’s benchmark contract has lost almost 18%, which is on top of the 35% drop in December.

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.


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