- All three major indices dipped Wednesday morning as Wall Street awaits a basket of earnings and a Fed decision this afternoon.
- GameStop continued its meteoric rise following a tweet from Elon Musk.
- Microsoft posted a 17% rise in sales in the latest quarter.
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US stocks fell Wednesday morning, with the Dow shedding 306 points and the S&P 500 slipping 1.14% as investors wait for a huge day of earnings.
The Federal Reserve is expected to keep monetary policy on hold when the FOMC releases a policy statement at 2:00 p.m. ET Wednesday. Investors will focus on the press conference by Chairman Powell that will follow.
“With no change to policy, the line of questioning will likely centre around the future withdrawn of accommodation, including the future tapering of asset purchases and rate liftoff. Powell will be light on specifics because while the outlook is titled to the upside, the uncertainty surrounding fiscal stimulus makes it impossible to lay out concrete guidance,” a team of Jefferies economists said.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Wednesday:
- S&P 500:3,805.68, down 1.14%
- Dow Jones industrial average: 30,630.42, down 0.99% (306.62 points)
- Nasdaq composite:13,464.22, down 1.23%
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Outside of the tech space, a slew of other major companies reported earnings Wednesday. Private-equity firm Blackstone reported earnings per share of $US1.13, compared to the consensus estimate of 89 cents per share. Starbucks beat estimates, while Boeing reported a loss of $US15.25 per share, while its revenue beat Wall Street expectations.
AMC shares skyrocketed as much as 260% in premarket trading on Wednesday as day traders piled into heavily shorted stocks for a third consecutive day. Frenzied buying also drove GameStop,which has already surged adding 685% in 2021. The Reddit-loved stock spiked after Elon Musk tweeted “Gamestonk!!” in after-hours trading Tuesday. BlackBerry and Bed Bath & Beyond also gained.
The record rise in these stocks has hit short sellers hard and divided opinions sharply. On Wednesday, “Big Short” investor Michael Burry, who took a bullish view of GameStop in 2019, tweeted the price moves are “unnatural” and “insane”.
Bitcoin was down 3.34% to $US30,649.4324. The cryptocurrency has wavered in a narrow trading range over the past week after surging to record highs earlier in the month.
Spot gold fell 0.55% lower, to $US1,840.70 per ounce. The US dollar gained slightly against Group-of-20 currency peers and Treasury yields dipped lower.
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