Wall Street falls sharply on the eve of the Federal Reserve’s interest rate decision – E24

Amazon falls cautiously before tonight’s figures release. On Wednesday, there will be a new interest rate decision from the Federal Reserve.

The matter is updated throughout the trading day.

This is how it looks around 19.15:

• The Dow Jones falls 1.06 percent.
• The technology index Nasdaq falls 1.25 percent.
• The collective index S&P 500 falls 1.03 percent.

On Monday, the week began with a broad rise.

Amazon numbers

Amazon presents quarterly figures after closing time on Tuesday.

In advance, it is expected that the online shopping giant will deliver a turnover of 142.59 billion dollars and a profit per share of 0.82 dollars, according to estimates from Bloomberg.

The share falls 1.01 percent.

The cloud service segment now accounts for a large part of the company’s growth. There is tension as to whether the figures would show that the company’s attempt to succeed with artificial intelligence (AI) is keeping the cloud services up.

Tech giants Meta, Microsoft and Alphabet all released figures last week. The quarterly reports lifted the markets last week after good results.

On Thursday this week, Apple opens its accounting books.

Labor costs are increasing

Before the stock market opened, figures were released which showed that total labor costs in the US rose more than expected in the first quarter.

The employment cost index increased by 1.2 percent in the quarter, which was faster than the 0.9 percent in the first quarter of 2023.

The index is followed closely by the Federal Reserve as a signal of the underlying inflation, writes CNBC.

– This is not a number that will make the Federal Reserve change its view that “there is no rush to ease”, but neither is it a number that will give them the view that “we have to raise interest rates”, says Tom Fitzpatrick , director of global market insights at RJ O’Brien and Associates, to CNBC.

Interest rate meeting at the Fed

Tomorrow, Wednesday, the American central bank, the Federal Reserve, will announce its interest rate decision. There is great excitement about what central bank governor Jerome Powell will signal about interest rate cuts.

Belief in interest rate cuts has steadily diminished, and expectations about the first interest rate cut have been pushed back in time.

On Friday, the new US inflation figure came in, which ended up slightly higher than expected. Price inflation in the US has calmed down from high levels, but recently the decline has stopped.

Last week there were also figures showing that the US economy grew less than expected in the first quarter, coming in at 1.6 per cent. In advance, 2.5 percent was expected, according to Bloomberg. In the previous quarter, growth was 3.4 per cent.

Federal Reserve Chairman Jerome Powell has repeatedly said that inflation is still too high. Earlier in April, Powell stated that it may take longer than expected to bring inflation down to the target.