The Market News Today: Powell Stresses High Rates to Persist Amid Stubborn Inflation

Powell: No Near-Term Interest Rate Cuts; Inflation Goals Unmet

Federal Reserve Chair Jerome Powell emphasized that despite solid economic growth and a strong labor market, the persistent inflation above the 2% target means that interest rates will likely remain high. Speaking at a U.S.-Canada economic forum, Powell indicated that the current restrictive monetary policy would continue until inflation approaches the target level. With inflation data still higher than anticipated and recent CPI readings at 3.5%, Treasury yields have risen, and no immediate rate cuts are expected.

ASML Shares Drop After Missing Sales Targets, Maintains Outlook

ASML’s shares fell by 4.5% on Wednesday following a shortfall in sales against expectations but confirmed its full-year forecast remains unchanged. The company reported net sales of 5.29 billion euros, missing the expected 5.39 billion euros, yet exceeded profit forecasts with 1.22 billion euros. Despite a year-on-year decline in sales and net income, ASML sees 2024 as a transition year, with strong prospects in the second half due to increased production capacity by major semiconductor firms.

U.S. Stock Futures Edge Upward Despite S&P’s Recent Losses

U.S. stock futures saw slight gains Wednesday morning following the S&P 500’s third consecutive day of losses. S&P 500 futures rose by 0.18%, Nasdaq 100 futures increased by 0.2%, and Dow futures gained 72 points. Notable movements in extended trading included United Airlines rising 5% after better-than-expected earnings, while J.B. Hunt fell 6% for missing targets. These shifts occur amid market caution influenced by Fed Chair Jerome Powell’s recent comments on interest rates and inflation.

United Airlines Soars, Autodesk Slips, J.B. Hunt Falls Pre-Opening

Ahead of the opening bell, stock movements were significant with United Airlines climbing nearly 6% due to robust travel demand and earnings surpassing expectations, projecting higher future earnings. Autodesk’s shares dropped 2.4% amid delays in its annual filing caused by an internal audit. J.B. Hunt Transport Services saw a decline over 5% after reporting earnings and revenue that fell below analyst forecasts, reflecting challenges in the transportation sector.

Gold Steady Amid Geopolitical Tensions; Oil Prices Dip on Demand Worries

Gold prices held steady, supported by safe-haven demand amidst heightened Middle East tensions, despite a strong U.S. dollar and high Treasury yields. Spot gold was stable at $2,381.68 per ounce. In contrast, crude oil prices edged lower due to global demand concerns, particularly weak economic indicators from China and delayed U.S. interest rate cuts. Brent futures slightly fell to $89.16 a barrel, with market sentiment affected by both geopolitical instability and economic data.