Stocks Erase Gains Amid Tech Rout, Powell Remarks: Markets Wrap

Stocks Erase Gains Amid Tech Rout, Powell Remarks: Markets Wrap

(Bloomberg) — Stocks erased gains amid a selloff in giant technology companies and Federal Reserve Chairman Jerome Powell’s remarks over an uncertain economic rebound without further stimulus.

Equities initially jumped as the Fed decided to leave rates near zero, while signaling it would hold them there through at least 2023. The rally quickly fizzled out after Powell said he’s not sure if the faster-than-expected economic recovery will continue. A tumble in tech behemoths such as Apple and Facebook also dragged down the gauge. The Treasury yield curve steepened slightly as Powell stopped short of offering new specifics on the Fed’s approach to the monthly bond purchases that have buttressed markets. Some traders may have been expecting some signal regarding plans to target longer maturities in its purchases.

Read: Fed Signals Rates Will Stay Near Zero for at Least Three Years

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.

“The fact that he’s highlighting the negative potential economic consequences of a lack of Congressional action on fiscal stimulus definitely served to unnerve investors,” said Alec Young, chief investment officer at Tactical Alpha LLC, referring to Powell.

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 in order to seal a stimulus deal in the next week to 10 days.

These are some of the main moves in markets:


The S&P 500 Index fell 0.5% as of 4 p.m. New York time.The Stoxx Europe 600 Index increased 0.6%.The MSCI Asia Pacific Index climbed 0.5%.


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.


The yield on 10-year Treasuries 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%.


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.” data-reactid=”42″>For more articles like this, please visit us at

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