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Wall Street Swings Wildly as Fed Signals Low Rates Here to Stay

Published 06/10/2020, 12:44 PM
Updated 06/10/2020, 03:19 PM
© Reuters.
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By Yasin Ebrahim

Investing.com - Wall Street slipped Wednesday, as traders continue to unwind their bets on stocks tied to the progress of the economic reopening even as the Federal Reserve signaled low rates would continue for some time.    

The Dow Jones Industrial Average fell 0.60%, or 164 points, the S&P 500 slipped 0.13%, while the Nasdaq Composite added 0.94%.

The Federal Open Market Committee left its benchmark rate unchanged in the range of 0% to 0.25%. The central bank forecasts that low rates will remain through 2022 and pledged to persist with its bond-buying program to ensure an eventual economic recovery will be robust.  

Energy and financials led the broader market decline as a jump in Covid-19 infections amid easing restrictions nationwide prompted investors to pull some of their bullish bets financials and energy.

Chevron (NYSE:CVX) down 2.7%, Exxon Mobil (NYSE:XOM) down 4.4%, and Occidental Petroleum (NYSE:OXY) down nearly 7.8% were among the notable decliners in energy.

In Texas, the number of new cases reported each day has increased from an average of about 1,081 during the week ending May. 24 to about 1,527 in the past week.

Energy was also hurt by a fall in oil prices as data showing an unexpected rise in U.S. weekly crude inventories sparked renewed concerns about crude demand.

Oil inventories climbed 5.7 million barrels for the week ended June 5, the EIA said, confounding estimates for a draw of 1.7 million barrels.

Technology, however, defied the broader market sell-off, with Apple and Nvidia (NASDAQ:NVDA) leading the gains, with the latter up nearly 4%.

Apple (NASDAQ:AAPL) rose 2.7% as Deutsche Bank (DE:DBKGn) raised its price target on the stock to $350 from $320.

In other news, Tesla (NASDAQ:TSLA) surged to all-time highs after Wedbush Securities hiked its price target on the stock to $1,000 from $800.

The demand for Model 3 is shaping up to be stronger than expected in China heading into summer, and the easing lockdowns in the U.S. and Europe, Wedbush said. With potentially "game changing battery developments on the horizon," Tesla has further room to run, it added. 

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