U.S. stocks ended sharply in the red on Wednesday, affected by remarks by US Central Bank (Fed) chairman Jerome Powell, removing the prospect of a drop in short-term interest rates. The Dow Jones Industrial Average, lost 0.61% to 26,430.14 points and the Nasdaq index fell 0.57% to 8,049.64 points. The broad S & P 500 index dropped 0.75% to 2,923.73 points.
The U.S. indices had yet started the session in the green, driven by the jump of Apple after its strong quarterly results and encouraging figures on US employment. But they went into negative territory when, after a two-day meeting of the Fed’s Monetary Policy Committee, its chairman felt that low inflation was a result of “temporary” factors. But it is partly because of the low inflation that the Fed, in March, postponed raising its rates. And President Donald Trump keeps blaming the Central Bank for “constantly” raising rates despite low inflation. As a result, more than half of the market participants estimated before this meeting that the Fed would decide to lower its rates at least once before the end of the year.
The private firm ADP announced a stronger rise than expected in job creation in the private sector during April, to 275,000 instead of 180,000 expected, but pointing out that this figure was inflated by technical factors.
Manufacturing activity in the United States slowed more than expected in April, moving at its weakest pace since the election of Donald Trump, according to the index of purchasing managers of this sector released Wednesday by the ISM.
The ISM manufacturing index fell 2.5 points to 52.8%, while analysts expected a level of 55%. New orders fell 5.7 points to 51.7%. Down 4.3 points, the underlying price index fell back to 50%.
On the oil market, the WTI lost some ground at $63 a barrel, while the North Sea Brent went below the $72 mark. Crude oil stocks in the United States rose sharply last week with production to a new record across the Atlantic, according to figures released Wednesday by the US Energy Information Agency. Commercial crude oil reserves increased by 9.9 million barrels to 470.6 million barrels.
