U.S major Bank settled lower in unison following the Fed’s decision in keeping rates low despite signs that showed the world’s largest economy was back on track.
JPMorgan Chase, the world’s most valuable bank by market value and investment banking juggernaut, Goldman Sachs recorded losses of more than 1%, while Wells Fargo, the California-based bank plunged by 2.9%.
Bank of America also dropped by 1% as investors took their bets off bank stocks on the bias that their bottom line would be negatively affected considerably on prevailing low rates metrics set by the American Apex bank.
- That being said, the 10-year Treasury yield reversed higher before consolidating at 1.73%, as it stayed around its 14-month high.
- Such metrics weighed on the U.S stock market has the Dow and the S&P 500 losing 0.5% and 0.8%, respectively, breaking their two-week winning streak.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics highlighted macros troubling stock investors amid rising Treasury yields;
“The rapid rise in long-end US yields has spooked investors again overnight as there appears to be no lasting respite for the fixed income onslaught
“Given the untimely ferocious nature of the sell-off, which caught some investors wrong-footed whilst cheering the FOMC “lower for longer” mantra, it caused a real stinger to longer duration growth asset sentiment like mega-cap tech names,” Innes said.
Bottom Line: Market pundits argue the current Fed’s narrative of keeping rates low isn’t working as the market is finding in the aftermath of the latest FOMC meeting.