Dow Down for Five Days, Oil Surge and Fed Hold on Interest Rates Weigh Sentiment
Wall Street closed mixed on Wednesday (April 29), with the Dow Jones Industrial Average falling again amid the continued rally in oil prices and the market digesting the Federal Reserve's decision to keep interest rates unchanged. The Dow fell 280.12 points (0.57%) to 48,861.81, marking its fifth consecutive losing session. The S&P 500 edged down 0.04% to 7,135.95, while the Nasdaq edged up 0.04% to 24,673.24.
Rising energy prices were again the main catalyst. WTI rose 7.17% to close at US$107.16/barrel, while Brent rose 6.78% to US$118.80/barrel. Oil prices rallied after reports that President Donald Trump had asked aides to prepare for a prolonged blockade of Iran, and then received further support after reports that Trump rejected Iran's proposal to reopen the Strait of Hormuz and asserted that the US naval blockade would remain in place until a deal addresses Iran's nuclear program.
On the monetary policy front, the Fed held interest rates in the 3.5%–3.75% range by an 8–4 vote, the first time since October 1992 that there were four dissenters. Fed Chairman Jerome Powell said high oil prices would drive up headline inflation in the near term, potentially limiting the path for rate cuts as long as the energy shock persists.
Powell also stated that he would remain as Fed chairman for an unspecified period after his term as chairman ends in May. Meanwhile, Kevin Warsh—Trump's preferred candidate—is considered on track to replace Powell, and the market is largely anticipating no change in interest rates at this meeting.
Investors' next focus will be on the quarterly earnings reports of four tech giants, scheduled for release after the close of trading: Alphabet, Amazon, Meta Platforms, and Microsoft. Market expectations are high that these issuers will demonstrate sufficient revenue growth to justify significant capital expenditures related to artificial intelligence (AI) investments, amidst macroeconomic conditions that are again sensitive to fluctuations in oil prices, inflation, and interest rates. (Arl)*
Source: Newsmaker.id
