Stock futures drop slightly after big Fed rally, Meta stocks drop

Traders react on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell at a news conference following a rate announcement the Fed, in New York, on July 27, 2022.

Brendan Mcdermid | Reuters

Equity futures fell slightly in overnight trading after markets staged a major rally during regular trading following another 0.75 percentage point hike from the Federal Reserve.

Futures contracts linked to the Dow Jones Industrial Average slipped 20 points, or 0.06%. S&P 500 futures lost 0.13% and Nasdaq 100 futures fell 0.36%.

Shares of Meta Platforms fell 3% in extended trading following disappointing quarterly results, while Ford gained more than 5% after a beating on the top and bottom results and increasing its dividend. Teladoc shares cratered more than 22% after taking another big goodwill charge.

The after-hours moves came after markets rallied broadly in regular trading on Wednesday, as the central bank hiked rates another 75 basis points and investors continued to bet on the the Fed’s ability to stop soaring prices without pushing the economy into a recession. .

All sectors of the S&P 500 ended the day higher, with communications services posting their best daily performance since April 2020.

During Wednesday’s regular trading session, the Dow Jones gained 436.05 points, or 1.4%, the S&P 500 added 2.62% and the Nasdaq Composite closed up 4.06%, boosted by shares of Alphabet and Microsoft.

“Essentially what is really driving this decision is that the economy is still doing well and it looks like the Fed is likely to slow the pace of tightening by the next policy meeting,” Ed Moya said. , senior market analyst at Oanda. .

Investors have grown increasingly worried in recent months that the central bank’s attempts to rein in soaring prices will push the economy closer to a recession, if it hasn’t already entered one.

Fed Chairman Jerome Powell told a news conference on Wednesday that he did not believe the economy had entered a recession.

“I don’t think the United States is currently in a recession and the reason for that is that there are too many sectors of the economy that are doing too well,” he said.

Investors looking for further clues about the state of the economy await a second-quarter GDP reading scheduled for Thursday. While two consecutive quarters of negative growth are considered by many to be a recession, the official definition is more nuanced, taking into account additional factors, according to the National Bureau of Economic Research.

Economists polled by Dow Jones expect the economy barely grew in the last quarter after contracting 1.6% in the first.

On the earnings front, investors are eagerly awaiting results from Apple, Amazon, Intel and Comcast scheduled for Thursday.

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