Stock market news live updates: Stocks leap after Powell signals rate hike slowdown – Yahoo! Voices

U.S. stocks soared Wednesday afternoon as investors cheered comments from Federal Reserve Chair Jerome Powell that signaled a 50-basis-point rate hike in December.
The S&P 500 (^GSPC) rose 3.1%, while the Dow Jones Industrial Average (^DJI) was up 2%, or over 730 points. The technology-heavy Nasdaq Composite (^IXIC) gained 4.4%.
In a highly anticipated speech at the Brookings Institution in Washington, Powell said it makes sense to "moderate the pace our rate increases" as the Fed heads toward its estimated peak in benchmark interest rates. Stocks surged after the text of Powell's speech was released.
The afternoon gains came after stocks finished lower on Tuesday, even as concerns regarding China’s strict zero-COVID policy abated. U.S.-listed Chinese stocks rose for the third day, adding to record rally this month as Beijing announced plans to accelerate vaccination of China’s elderly on Tuesday, spurring optimism among investors about a path forward for easing COVID restrictions amid nationwide protests.
The U.S. dollar was weaker Wednesday, while the yield on the benchmark 10-year Treasury note slipped. In oil markets, the global benchmark Brent crude (BZ=F) climbed 2.3% to $82.90 a barrel. WTI crude oil (CL=F) rose 2.6% on Wednesday to $80.25 a barrel.
For investors, though, Powell's speech, likely his final comments before the Fed's next rate setting meeting in mid-December, was the highlight of a jam-packed day in economic data points.
The speech also comes less than two weeks before the release of November’s consumer price data.
Strategists said the market has has already “priced in” the coming rate hike slowdown and higher terminal federal funds rate, both of which Powell had already hinted at in his early November conference.
"Every cycle is clearly different but with markets increasingly confident of a terminal rate around 5% and inflation getting back close to target in 2024, it’s worth remembering that exactly a year ago today, markets were pricing a Fed Funds rate of 0.68% by the end of 2022 and CPI of 2.6% (consensus of economists)," Jim Reid, Head of Thematic Research at Deutsche Bank, wrote in a note. "We will likely have an eventual miss of c.370bps and c.500bps, respectively."
Early in the day, investors studied another wave of macroeconomic data. The ADP employment report showed that private companies added 127,000 jobs for November, below expectations of about 200,000, in further signals of a cooling labor market.
“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” Nela Richardson, chief economist at ADP, said in a statement. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”
Also on the data front:
US GDP for the 2022 third quarter increased at a 2.9% annual rate, according to a government estimate. The report also found that the Personal Consumption Expenditure (PCE) index, which measures the price of consumer goods and services, increased 4.3% in the quarter, an upward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 4.6%, also revised up 0.1 percentage point.
US job openings fell to 10.33 million in October, down 10.68 from the prior month, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) survey. Economists surveyed by Bloomberg expected job openings to dip to 10.25 million on the month.
Signed contracts to buy existing homes in the U.S. fell 4.6% in October, the fifth consecutive decline as higher rates wane on demand, data from the National Association of Realtors showed Wednesday.
The Chicago Purchasing Managers Index (PMI) fell to 37.2, below expectations of 47.0, the lowest reading since reading since June 2020.
Finally, the Fed's Beige Book, a survey of the Fed's regional banks, found that economy grew steadily and inflation slightly eased while several businesses signaled "greater uncertainty or increased pessimism" around this year end's outlook.
Shares of CrowdStrike Holdings, Inc. (CRWD) sank more than 14% after the cybersecurity company’s forecasted quarter revenue came in short of analyst expectations as clients cut back on spending and delayed purchases due to macroeconomic headwinds. DoorDash (DASH) is laying off about 1,250 people in an effort to cut expenses, according to a report from Bloomberg, citing a memo from it CEO Tony Xu.
Also in corporate news, Workday (WDAY) shares rose 17% on Wednesday after the cloud-service company reported higher revenue for the quarter and lifted its subscription revenue guidance. Salesforce (CRM) stock plummeted after hours as the company said co-CEO Bret Taylor would step down early next year.
And in crypto news, Kraken is laying off 30% of its staff as the company cited that trading volumes have fallen "significantly." Kraken's move to downsize comes in the wake of FTX's collapse earlier this month.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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Fed Chair Jerome Powell set the table for a slowdown in the Fed's recent pace of rate hikes during a highly-anticipated speech on Wednesday.
U.S. stocks finished sharply higher Wednesday after Fed Chair Powell said the central bank's pace of interest-rate increases can slow as soon as its December meeting.
Futures fell ahead of a key inflation report. On Wednesday, the S&P 500 jumped above the 200-day line on Fed chief Powell's comments.
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"We might get rid of inflation, but at a very high human cost," Powell said at the Brookings Institution in Washington, in response to a question from a JP Morgan economist about if he would take a "shock and awe" approach to rate hikes. "I think we are in a position where the right thing to do is to move really quickly as we have, and now slow down and get to that place where we think we need to be, and by the way, there's high uncertainty around that."
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The Federal Reserve's favorite inflation indicator, the PCE Price Index, will be released by the BEA today. The PCE Index differs from the better-known Consumer Price Index in that its components are more variable and are quicker to reflect real-time pricing fluctuations. In the most-recent report (from September), PCE inflation was reported at 6.2% (the latest CPI report, from October, had inflation at 7.7%). At Argus, we forecast a rate of 5.9% for the October PCE Price Index. Core PCE, which removes volatile food and energy prices, was 5.1% in the last month. We expect the Core PCE to tick lower to 5.0% this month. Overall, inflation appears to have peaked during the summer and is starting to decline. We track 21 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 5.2% rate year-over-year, down from 6.8% last month and from 8.7% four months ago. Drilling down to core inflation (which we obtain by averaging Core CPI, market-based PCE Ex-Food & Energy, the core GDP PCE Price Index, the five-year forward inflation expectation rate, and the 10-year TIPs Break-even Interest Rate), our reading is 4.1%. That's down slightly from our 4.3% reading last month. We note some movement among our components. Producer Prices appear to be cooling off, with substantial declines in PPI Intermediate Prices for Processed and Unprocessed Goods. The rate of wage increases also is slowing. Looking down the road, investors are expecting that the Federal Reserve's series of rate hikes ultimately will tame inflation, with the three-year forward expectation rate now down to 3.1% and the five-year forward expectation rate at 2.3%.
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STORY: Wall Street ended sharply higher across the board on Wednesday, as investors barreled into stocks after Federal Reserve Chair Jerome Powell said the central bank might soon scale back the pace of interest rate hikes.The Dow gained 2 percent, the S&P 500 gained 3 percent and the Nasdaq soared more than 4 percent.While Powell gave investors a reason to buy—he also cautioned that the fight against decades-high inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.Ryan Belanger, founder and managing principal of Claro Advisors, said that while investors reacted favorably Wednesday …. he still thinks the Fed is a major risk factor for stocks.Belanger: "If you are buying into this [stock] market, you are fighting the Fed. The Fed is trying to slow the economy down. They need to do this to get one of their mandates back into control and so, to me, I don't want to fight the Fed."Among the big movers —Tesla shares surged after reports that its sales in China in November were boosted by price cuts and incentives.Biogen jumped after its experimental Alzheimer's drug was shown to slow cognitive decline in a closely watched trial.Meanwhile, megacap tech stocks Nvidia, Microsoft and Apple also posted strong gains.
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