Stock Market Hangs On The Fed’s Decision; Chip Stock Jumps

The stock market started the new month feeling tense Tuesday, ahead of this afternoon’s Fed meeting and interest-rate decision. X The Dow Jones Industrial Average shed 0.9% and the S&P 500 dipped 0.5% ahead of the Fed announcement. The Nasdaq gave back 0.3% while the small-cap Russell 2000 was in line with the major indices, trimming 0.3%. Volume for both the NYSE and Nasdaq was higher vs. the same time on Tuesday. The Dow held above its 50-day and 21-day exponential moving averages, while the S&P 500 traded above its 200-day moving average. The Nasdaq found support at its 200-day line. The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) retreated 0.2%. Crude oil shed 3.2% to $76.32 per barrel. The Energy Select Sector SPDR (XLE) ETF shaved off 2.8%. Bitcoin futures pulled back 0.5% to $23,135. The Innovator IBD 50 ETF (FFTY) dropped 0.8% and is below the 50-day line. European stock markets were mixed, with the German DAX inching up 0.4% and the Paris CAC dropping 0.1%. The London FTSE trimmed 0.1% to close out the trading day. The 10-year Treasury note yielded 4 basis points to 3.47%. How Did Your Online Broker Do In IBD’s 2023 Best Online Broker Survey? The Fed’s Stocks Are Key The Fed is expected to raise rates by one quarter of a percent at the conclusion of its meeting at 2 pm ET. The move would put the fed funds rate at a 4.5%-4.75% range. The 25-basis-point move is smaller than the half-point increase in December and the four straight 75-basis point increases in 2022. Markets anticipate another 25-basis point hike in March, taking the fed fund rate to 4.75%-5 %, then taking a breather to evaluate. The March move would put the rate near the Fed’s targeted 5%-5.25% rate, where they feel they can take a break to let the economy absorb the moves. Investors will be listening for words to support or discard the “ongoing increases” language previously used in the Fed’s Policy statement. Fed Chair Jerome Powell is scheduled to speak at a press conference at 2:30 ET following the meeting. Markets may be volatile for hours or even days following his move and his comments. Labor Market Gets Mixed Signals The January ADP employment report showed private payrolls increased only 106,000 vs. the 158,000 consensus, and considerably lower than December’s robust revised 253,000 jobs. The increase is the smallest in two years, according to Commonwealth Financial Network. The drop can be attributed to factors including seasonal layoffs and weather-affected jobs. On the other hand, the December Job Openings and Labor Turnover (JOLTS) report came in at 11.012 million vs. the 10.2 million consensus. The ISM manufacturing Index was 47.4 vs. the 48.0 expected, and a drop from December’s 48.4. The drop shows further deterioration in the manufacturing sector. The index compiles and measures new orders, production, employment, supplier deliveries, and inventories from around 300 US manufacturers. Stock Market: AMD Pops, Snap Plunges Semiconductor company Advanced Micro Devices (AMD) gapped up 9% in heavy volume, after reporting better-than expected Q4 EPS and sales numbers Tuesday after the market closed. The jump sent the stock over its 200-day line, where it found support. AMD is the S&P 500 leader today. Electronic Arts (EA) plummeted over 12% after reporting a miss on December-quarter EPS but a beat on sales. The video game publisher announced it will delay its Star Wars game and stop development of two mobile games. The plunge sent the stock below its 50-day and 200-day lines. Atkore (ATKR) gapped up 10.2% after reporting a beat on its fiscal Q1 top and bottom lines. Shares blew past a flat base with 128.46 buy point. Western Digital (WDC) pulled back 3.8% after reporting a miss on December-quarter earnings but a beat on sales. It also gave lower-than-expected Q3 revenue guidance. The drop sent shares below the 200-day moving average. The data storage device manufacturer is an S&P 500 big loser today. The parent company of Snapchat, Snap (SNAP), plunged 13.6% after reporting a 36% drop on Q4 earnings and warned that current-quarter sales are likely to fall. Stock Market Movers: Fitness Stock Jumps Medical equipment maker Stryker (SYK) popped 7% in heavy volume after reporting better-than-expected Q4 adjusted EPS and sales late Tuesday. Peloton (PTON) spiked over 20% in heavy volume on a mixed fiscal Q2 2023 earnings report, and higher subscribers for the quarter. The interactive fitness equipment company gave upbeat comments. Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig. YOU MAY ALSO LIKE: Get Free IBD Newsletters: Market Prep | TechReport | How To Invest What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It IBD Live: Learn And Analyze Growth Stocks With The Pros MarketSmith’s Tools Can Help The Individual Investor Looking For The Next Big Stock Market Winners? Start With These 3 Steps

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