Stocks drop ahead of the Fed’s decision

US stocks fell near midday on Wednesday as traders await the latest monetary policy decision from the Federal Reserve later this afternoon.

Near noon on Wednesday, the S&P 500 (^ The Salafist Group for Preaching and Combat(down by 0.5%, while the Dow Jones Industrial Average fell (^ DJI) sank by 1%. Nasdaq Technology Heavy Composite (^ ix) fell 0.4%.

On Tuesday, stocks capped off a strong start to the year, with the S&P 500 posting its best January since 2019 while the Nasdaq 100 enjoyed its strongest January rally since 2001, up more than 10%.

Dull trading comes in on Wednesday before noon A highly anticipated policy announcement From the Federal Reserve, the first central bank of the year.

Wall Street expects the Fed to announce a 0.25% increase in its benchmark interest rate, marking the second consecutive meeting in which the Fed has slowed the pace of interest rate increases.

The Fed’s policy statement is scheduled for 2pm ET, with Fed Chair Jerome Powell set to hold a press conference starting at 2:30pm ET.

Earnings season also still in effect, with Another disappointing quarter from Snap (pop) from last night garnered the most attention of investors.

Shares of the social media company fell more than 14% after the company he told investors Its internal projections assume that revenue in the current quarter will decline between 10% and 2% from last year.

match set (MTCH) and electronic arts (EAShares also fell more than 9% and 12%, respectively, on Wednesday After disappointing quarterly reports Tuesday afternoon.

peloton (PTONShares rose more than 17% on Wednesday after the company reported that its cash burn fell to $94 million in the most recent quarter, down from $747 million nine months ago. On an adjusted basis, the company reported $8 million in free cash flow during the holiday quarter.

“If you’re wondering whether or not the peloton can make an epic comeback, this quarter’s results show that the changes we’re making are working,” said CEO Barry McCarthy. He wrote in a letter to shareholders.

The earnings highlight will come on Wednesday after market close when (Meta Platforms)meta) issues its quarterly report.

On the economic data side, New data on the growth of private salaries The ADP showed private employers added 106,000 jobs last month, less than the 170,000 expected by economists.

In its report, the ADP said the weather affected its measure of the labor market, citing flooding in California and blizzards in the central and eastern parts of the country during the reference week.

“In January, we saw the impact of weather-related disruptions on employment during our reference week. Employment was stronger during the other weeks of the month, in line with the strength we saw late last year,” said Nella Richardson, chief economist at ADP.

data about December job openings He noted on Wednesday that demand for workers remains strong, with 11 million jobs available at the end of the month, up from 10.4 million at the end of November.

Elsewhere in the economic data, readings on the manufacturing sector from S&P Global and the Institute for Supply Management showed that activity remained subdued in the first month of 2023.

Latest ISM Manufacturing PMI The reading fell to its lowest level since May 2020which economists consider another sign of continued recessionary pressures in the US economy.

Andrew Hunter, chief US economist at Capital Economics, wrote in a note to clients on Wednesday that a more detailed look at the ISM report indicates that “domestic economic weakness is increasingly a major driver of manufacturing sector woes, and overall, the ISM report reinforces our view that The US economy is close to recession.

Standard & Poor’s Global Reading showed Manufacturing activity deteriorated at a slightly slower rate in January than December, but still indicated an “alarmingly sharp rate of decline in the health of the goods-producing sector,” according to Chris Williamson, chief business economist at S&P Global Market Intelligence.

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