US stocks near flat as market digests Fed update

In this file photo people walk past the New York Stock Exchange (NYSE) and a statue of George Washington at Wall Street on March 23, 2021 in New York City. — AFP pic
In this file photo people walk past the New York Stock Exchange (NYSE) and a statue of George Washington at Wall Street on March 23, 2021 in New York City. — AFP pic

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NEW YORK, June 17 — Wall Street stocks hovered near the flat-line early today as investors digested the Federal Reserve’s latest policy statement and the unexpected rise in jobless claims last week.

The Fed yesterday maintained highly accommodative monetary policy as expected, but several policymakers projected interest rate hikes as soon as 2022 and a majority of central bank officials now believe interest rates will increase in 2023, rather than 2024.

Meanwhile, after six weeks of declines, new US jobless claims rose to 412,000, seasonally adjusted, in the week ended June 12, which was 37,000 more than the previous week, the Labor Department said.

About 30 minutes into trading, the Dow Jones Industrial Average was down 0.3 per cent at 33,926.90.

The broad-based S&P 500 was essentially flat at 4,222.49, while the tech-rich Nasdaq Composite Index gained 0.3 per cent to 14,084.23.

Analysts described the Fed’s overall message as modestly more hawkish than expected, even as Chair Jerome Powell reiterated that the central bank still sees the current inflation spike as a short-term challenge.

But Powell also stressed the Fed will be willing to act if needed to contain inflation, though policymakers are not looking at an interest rate hike as the first step.

“The countdown to ‘liftoff’ has started, even if it is some ways off,” said a note from DataTrek Research.

“Earnings growth should buffer stock prices against that issue; we still believe the Street’s estimates are too low. But make no mistake: the Fed put rate policy back on the market’s front burner today.” — AFP

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