Stocks fall on lack of Fed action
Stocks fell and the dollar extended gains after the Federal Reserve left interest rates unchanged while confirming it was still on course to hike in December.
Tech underperformed after Jack Dorsey’s Square Inc. gave a disappointing forecast and Roku Inc. reported slower growth, while a rout in energy companies helped pull down the S&P 500 Index from a one-month high. Oil fell a ninth straight day and reached a bear market. Treasury yields held steady.
Investors had largely anticipated that the Fed wouldn’t change interest rates at today’s announcement, so instead were focused on looking for any signals on the pace of policy tightening into 2019. The central bank said “economic activity has been rising at a strong rate” and job gains “have been strong,” acknowledging a drop in the unemployment rate, while repeating its outlook for “further gradual” rate increases in its statement.
“The Fed didn’t make any significant changes,” said Michael Ning, the chief investment officer at PhaseCapital. “They are sending a message: They are doing whatever they’ve been doing.”
Elsewhere, European stocks pared an earlier advance spurred by strong earnings from companies including AstraZeneca Plc, though they ended in the green after an upbeat day in Asia. Italian bond yields jumped after the European Union warned the nation’s budget deficit will move dangerously close to the bloc’s limit of 3 percent.
U.S. filings for unemployment benefits held near an almost five-decade low, indicating a robust job market. China reported a surge in exports and imports for October, months before the next round of tariff hikes in the trade war with the U.S. is set to kick in.