US Federal Reserve Governor Christopher Waller at a Fed Listens event in Washington, DC, US, Friday, September 23, 2022.
Al-Draco | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our new international markets newscast. CNBC Daily Open updates investors on everything they need to know, wherever they are. Like what you see? You can subscribe here.
After defying the Federal Reserve for weeks, US markets realized that interest rate hikes were likely here to stay.
What you need to know today
- US stocks fell, along with the Nasdaq 1.68% drop, most of the big three indices. Asia-Pacific Equities traded thursday mixed: the Nikkei 225 fell 0.58% while the Hang Seng index rose 0.46%.
- Disney earnings and revenue in the first fiscal quarter exceed analysts’ expectations. Investors liked what they heard. The company also lost about 600,000 fewer subscribers than it had previously anticipated. And he plans to cut 7,000 jobsi.e. 3% of its workforce.
The bottom line
US markets finally got the message from the Fed.
On Wednesday, two officials essentially echoed Fed Chairman Jerome Powell’s hawkish speech on Tuesday. The Fed’s Waller warned that tackling inflation could be a long process, “with interest rates higher for longer than some currently expect.” Likewise, New York Fed President John Williams said that monetary policy could become even tighter than the central bank had anticipated.
Investors have been paying attention. The Nasdaq Composite fell 1.68%. The S&P 500 slid 1.11% and the Dow Jones Industrial Average slid 0.61%. Markets were also battered by a disappointing earnings season: 42 S&P 500 companies issued negative earnings forecasts for the first quarter of 2023, according to Refinitiv – a higher proportion than the historical average.
Although unrelated to earnings, Alphabet shares, Google’s parent company, fell more than 7% on Wednesday after investors were disappointed by the company’s showing of Bard. They may also have been concerned after Google ran an ad for Bard, in which he gave the wrong answer to a prompt about the James Webb Space Telescope. In a wave of bad news, investors might indeed need a telescope to find short-term good news.
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