STORY: U.S. stocks finished flat to slightly lower on Wednesday, with the Dow little changed, the S&P 500 down more than two-tenths of a percent and the Nasdaq sliding two-thirds of a percent.
Speaking at a European Central Bank panel in Portugal, U.S. Federal Reserve Chair Kevin Warsh said he will stick firmly to the central bank’s 2% inflation target and “disappoint” anyone who expects loose monetary policy despite President Donald Trump’s call for interest rate cuts.
But Brad Bernstein, managing director at UBS Private Wealth Management, doesn’t think the Fed will hike rates this year either.
“One of the three reasons we think markets will be higher at the end of the year is because the Fed is not going to raise interest rates this year. // We think more likely they’ll resume Fed cuts in the spring of next year. And today, Fed Chair Walsh said in Portugal that he has seen in the last four weeks expectations, inflation expectations continuing to get better because of the drop most likely he – didn’t cite this – but most likely because oil has gone from 90 [dollars a barrel] to 70 and now under 70 today.”
Among Wednesday’s stock moves, technology shares fell, with the Philadelphia Semiconductor Index down more than 6%.
One tech outlier was Meta Platforms after Bloomberg News reported that it is building a cloud business to sell excess AI computing capacity.
Among the day’s decliners, shares of Alcoa fell about 9% after Australia’s South32 agreed to sell most of its aluminum assets to Alcoa.
The key monthly U.S. jobs report is due out on Thursday, while the market will be closed Friday ahead of the Fourth of July holiday.
