Tech Stocks Keep Market's Day From Being Worse

Investors continue to digest moves by the Fed
By Newser Editors and Wire Services
Posted Jun 17, 2021 3:07 PM CDT
Tech Stocks Keep Market's Day From Being Worse
People walk on Broadway at Wall Street Wednesday, June 16, 2021.   (AP Photo/Richard Drew)

Stock indexes flipped between gains and losses on Wall Street Thursday as investors made preparations for a future where the Federal Reserve is no longer doing everything it can to keep interest rates super low. The Dow fell 210 points to 33,823, the S&P 500 fell a single point to 4,221, and the tech-dominated Nasdaq gained 121 points to 14,161. This came after the Federal Reserve signaled on Wednesday that it may start raising short-term interest rates by late 2023, per the AP. The Fed's chair also said it began discussing the possibility of slowing its bond-buying program, which is keeping longer-term rates low. Such support has been a key reason for the stock market's resurgence to records, with the most recent coming Monday.

The first action the Fed is likely to take would be a slowdown in its $120 billion of monthly bond purchases, which are helping to keep mortgages cheap, but the Fed's chair said such a tapering is still likely "a ways away.” Any easing up on the Fed's aid for the economy would be a big change for markets, which have feasted on easy conditions after the central bank slashed short-term rates to zero and brought in other emergency programs. While the economy still needs support, the recovery is proving to be strong enough that it does not need the same emergency measures taken at the beginning of the pandemic, said Stephanie Link, chief investment strategist and portfolio manager at Hightower. “We are going to get a taper," she said. “They need to—we do not need emergency stimulus at this point.”

(More stock market stories.)

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