The Dow Jones Industrial Average slid 62.75 points, or 0.18 per cent, to close at 35,088.29, the S&P 500 slipped 0.20 per cent, ending at 4,538.19, while the Nasdaq Composite dropped 0.59 per cent to 14,199.98
Stocks slipped on Tuesday as traders evaluated the latest Federal Reserve meeting minutes, where officials gave no signal of interest rate cuts.
The Dow Jones Industrial Average slid 62.75 points, or 0.18 per cent, to close at 35,088.29. The S&P 500 slipped 0.20 per cent, ending at 4,538.19, while the Nasdaq Composite dropped 0.59 per cent to 14,199.98. Both the broad-market benchmark and the tech-savvy Nasdaq snapped a string of five successive winning days.
The Fed indicated that policy will need to remain “restrictive” amid concerns that inflation could be stubborn or rise. Policymakers left the benchmark rate at 5.25 per cent to 5.5 per cent at the end of their October 31-November 1 meeting.
In discussing the policy outlook, participants continued to judge that it was crucial that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time, the minutes stated.
Fed funds futures pricing indicates near unanimity that the FOMC (Federal Open Market Committee) will hold steady at its upcoming December meeting, and is pricing in cuts starting in May.
It is possible that we are in the middle of (an) infrequent but very important generational regime shift. And it is possible that we are not going back to zero rates, said Jon Burkett-St. Laurent, senior portfolio manager at Exencial Wealth Advisors. That does not necessarily mean that rates will go to 20 per cent in a straight line, but it probably does mean that rates are up and down in a higher range than they were over much of the last decade.
As rates remain “higher for longer,” housing data shows last month was difficult for prospective homebuyers. Current home sales in October came in at 3.79 million units, versus estimates of 3.9 million, as per the National Association of Realtors. This marked the slowest sales pace since August 2010, and a 14.6 per cent drop from the previous year.
