US Equities Close Lower on Thursday Amid Powell’s Remarks

U.S. equity markets closed in the red on Thursday as investors reacted to comments from Federal Reserve Chair Jerome Powell.

• In prepared remarks ahead of a live event hosted by the Dallas Fed and the Dallas Regional Chamber, Powell stated that the Federal Open Market Committee can afford to proceed “cautiously” when it comes to lowering interest rates. “The current economic conditions do not indicate an urgent need to cut rates,” Powell said. “The robust performance of the economy allows us to take a careful approach, and our future rate decisions will be guided by incoming data and the evolving economic outlook.”
• The Bureau of Labor Statistics reported an acceleration in U.S. producer price growth for October, driven by a rebound in the wholesale cost of goods. Consumer inflation data for the same month aligned with market forecasts.
• “While the consumer price index and producer price index data this week indicate that prices increased more quickly in October, there is no evidence of a broader acceleration in inflation,” noted Oxford Economics.
• According to the CME FedWatch tool, the likelihood of the Fed reducing its benchmark interest rate by 25 basis points next month fell to 75% on Thursday from 83% on Wednesday. The chance of rates staying unchanged increased to 25%.
• December West Texas Intermediate crude oil rose $0.27, closing at $68.70 per barrel, while January Brent crude, the global benchmark, gained $0.24 to reach $72.52. This came despite a larger-than-expected rise in U.S. oil inventories and the International Energy Agency’s unchanged 2024 demand forecast, coupled with expectations of supply surpassing demand next year due to higher non-OPEC production.
• Walt Disney (DIS) posted stronger-than-anticipated fiscal Q4 earnings, driven by its streaming segment. The company anticipates growth in adjusted earnings in fiscal 2025, sending its shares up by 6.2%.