Mixed Market Performance as Investors Digest News and Fed Chairman Powell Hints at Faster Rate Hikes

On Thursday, the markets saw a mixed performance as investors digested a flurry of news. The Dow Jones Industrial Average (DJIA) dropped 0.2%, the S&P 500 (SPX) edged up 0.1%, and the Nasdaq Composite (COMP) gained 0.4%.[0] The small-cap Russell 2000 (RUT) eked out a fractional gain.[1] CrowdStrike Holdings (CRWD) jumped more than 6% in pre-market trading after reporting Q4 revenue of $637.4 million, above the consensus of $624.8 million, and forecasting 2024 revenue of $2.96 billion-$3.01 billion, stronger than the consensus of $2.96 billion.[2]

United Natural Foods (UNFI) plunged more than 20% in pre-market trading after reporting Q2 adjusted EPS of 78 cents, well below the consensus of $1.43, and cutting its full-year adjusted EPS forecast to $3.05-$3.90 from a prior estimate of $4.85-$5.15, weaker than the consensus of $4.97.[3]

Silvergate Capital (SI) plunged over 43% in pre-market trading after announcing a wind-down of operations and plans to liquidate Silvergate Bank.[4]

Tesla (TSLA) fell more than 1% in pre-market trading after Berenberg downgraded the stock to hold from outperform.[2]

Meanwhile, the 10-year U.S. Treasury yield decreased to 3.92%, while the 2-year Treasury yield decreased to 4.89%, bringing the spread between them to -97 basis points.[5] As the Federal Reserve has been raising interest rates in an attempt to control inflation, investors have been observing the labor market for indications of possible weakening.[6]

Unemployment claims soared to 211,000, significantly exceeding Econoday's expectations of 195,000, a slight rise from the prior week's 190,000.[6] The consistent low number of weekly jobless claims is an indication of the labor market's endurance, which has caused market anxiety that the Federal Reserve may be raising interest rates for an extended period of time.[7]

On Wednesday, Federal Reserve Chairman Jerome Powell told Congress the central bank was prepared to accelerate the pace of rate hikes in order to tame inflation.[8]

0. “Dow futures flat, Asana pops 28.2% after earnings By Investing.com” Investing.com, 8 Mar. 2023, https://www.investing.com/news/stock-market-news/dow-futures-flat-asana-pops-282-after-earnings-3025566

1. “Futures: Market Rally At Key Levels; Tesla Extends Slide” Investor's Business Daily, 9 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-market-rally-stuck-at-key-levels-tesla-extends-slide

2. “Markets Today: Stock Indexes Slightly Higher as Bond Yields Fall” Barchart, 8 Mar. 2023, https://www.barchart.com/story/news/14882609/markets-today-stock-indexes-slightly-higher-as-bond-yields-fall

3. “Stock Market Today: Stocks Choppy After Strong Jobs Data” Kiplinger's Personal Finance, 8 Mar. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-030823-stocks-choppy-after-strong-jobs-data

4. “Stock Index Futures Move Lower As Fed Jitters Persist” Barchart, 9 Mar. 2023, https://www.barchart.com/story/news/14913951/stock-index-futures-move-lower-as-fed-jitters-persist

5. “Nasdaq, Dow fall more than 1% each, S&P 500 breaches key support levels” Seeking Alpha, 9 Mar. 2023, https://seekingalpha.com/news/3946037-nasdaq-sp500-dow-jones-stock-market-jobless-claims-silvergate

6. “U.S. stocks open higher as investors weigh data showing rise in weekly jobless claims” MarketWatch, 9 Mar. 2023, https://www.marketwatch.com/story/u-s-stocks-open-higher-as-investors-weigh-data-showing-rise-in-weekly-jobless-claims-c0e8685e

7. “Dow Jones Rallies 175 Points On Surprise Jump In Jobless Claims; Silvergate Crashes 40%” Investor's Business Daily, 9 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-dip-ahead-of-jobless-claims-bitcoin-drops-as-crypto-bank-silvergate-crashes/

8. “S&P 500 Settles Slightly Higher, Market Volatility Declines – Apple (NASDAQ:AAPL), CrowdStrike Holdings (” Benzinga, 9 Mar. 2023, https://www.benzinga.com/news/earnings/23/03/31272132/s-p-500-settles-slightly-higher-market-volatility-declines

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