On the losing end of Wall Street was Super Micro Computer, whose stock had earlier zoomed from less than $US100 ($153) to more than $US1000 in a year. The seller of server and storage systems used in AI and other computing, sank 9 per cent after it said it’s looking to sell 2 million shares of its stock.
Elsewhere on Wall Street, the focus was on the Federal Reserve.
The Fed began its latest meeting on interest rates and will announce its decision on Wednesday. The widespread expectation is for it to leave its main interest rate alone at a two-decade high. The hope is that it will indicate it still expects to cut rates three times later this year, as it hinted a few months ago.
Part of the run for US stocks to records has been because of hopes for such cuts, which would relieve pressure on the economy and financial system. But recent reports on inflation have consistently been coming in worse than expected. That could force the Fed to say it will deliver fewer rate cuts this year, and traders have already given up earlier expectations that the year’s first cut would arrive on Wednesday.
Strategists at Bank of America expect Fed officials to stick with forecasts showing the median member still expects three cuts in 2024. But it’s a close call, and “risks skew to fewer cuts signalled,” according to the strategists led by Mark Cabana.
Treasury yields eased in the bond market ahead of the announcement. The yield on the 10-year Treasury slipped to 4.29 per cent from 4.33 per cent late Monday.
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High yields and interest rates can hurt prices for stocks broadly, while also sucking dollars and enthusiasm out of excited parts of the market.
Bitcoin’s price has been generally sliding since hitting a peak above $US73,000 last week. It’s notorious for taking investors through severe swings in price. It fell further overnight and dropped below $US63,900.
In stock markets abroad, Japan’s Nikkei 225 rose 0.7 per cent after the Bank of Japan hiked its benchmark interest rate for the first time in 17 years. In a historic move, it moved the rate back to a range of zero to 0.1 per cent and made other changes, ending a long experiment of rates below zero meant to boost the economy and inflation.
The era-defining move was widely expected, and it still keeps interest-rate policies easy, analysts said.
Stocks fell 1.2 per cent in Hong Kong and 0.7 per cent in Shanghai after Troubled property developer China Evergrande Group said Beijing’s market watchdog fined it 4.2 billion yuan ($910 million) for allegedly falsifying its revenue, among other violations.
Stocks were mixed elsewhere in Asia and Europe.
AP
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Source Agencies
