New York Stock Market Mixed Ahead of FOMC and Big Tech Earnings... Tesla Up 10%

FOMC from the 30th... Powell's Hawkish Remarks Key
April Employment Report Also Released on the 3rd
Apple and Amazon Earnings Announcements Follow This Week

The three major indices of the U.S. New York stock market showed mixed movements around the opening on the 29th (local time). Amid continued strong corporate earnings, investors are awaiting the Federal Open Market Committee (FOMC) meeting held over two days starting on the 30th and the April employment report to be released on the 3rd of next month. This week also features earnings announcements from Apple and Amazon.

As of 9:53 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was trading at 38,332.06, up 0.24% from the previous close. The large-cap focused S&P 500 index rose 0.14% to 5,107.26, while the tech-heavy Nasdaq index was down 0.02% at 15,924.21.

By individual stocks, Tesla surged 9.86% on news that it passed data safety inspections in China, signaling a green light for the local launch of its Full Self-Driving (FSD) software. Apple rose 3.69% after investment firm Bernstein upgraded its rating from 'Market Perform' to 'Outperform.' Domino's Pizza jumped 3.22% as its earnings exceeded market expectations.

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Companies are expected to continue strong first-quarter earnings. According to market research firm FactSet, 45% of the companies in the S&P 500 have reported earnings so far, with more than four out of five beating expectations.

The market's main focus is the FOMC meeting held over two days starting on the 30th. The Fed is widely expected to maintain the current benchmark interest rate at 5.25?5.5%, the highest level in 23 years. The key issue is how hawkish Fed Chair Jerome Powell’s message will be. Inflation has remained persistently strong this year, making a delay in Fed rate cuts a foregone conclusion. The core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 2.8% year-over-year in March, exceeding the expert forecast of 2.6%.

Market expectations for rate cuts are also retreating. There are views that there may be only one rate cut this year or possibly none at all. There is even speculation that the Fed could consider raising rates again.

Anna Wong, an economist at Bloomberg Economics (BE), Bloomberg’s economic research arm, said, "We expect Chair Powell to make a hawkish pivot," adding, "He is likely to signal fewer rate cuts than the initially projected three, and may even hint at the possibility of no rate cuts." She also noted, "He might even suggest that a rate hike remains on the table."

David Kostin, Goldman Sachs’ chief U.S. equity strategist, said, "Concerns about hawkish monetary policy amid better growth have increased over the past few weeks," adding, "Stocks have found it harder to digest this."

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On the 3rd, after the FOMC, the U.S. Department of Labor will release the April employment report. If solid employment continues amid only modest declines in inflation, rate cuts will likely be further delayed. The market expects nonfarm payrolls in April to increase by 243,000, a significant drop from March’s 303,000. The April unemployment rate is forecast to remain steady at 3.8%.

U.S. Treasury yields are slightly lower. The 10-year Treasury yield, a global bond benchmark, fell 2 basis points (1 bp = 0.01 percentage point) to 4.64%, while the 2-year Treasury yield, sensitive to monetary policy, dropped 1 bp to 4.98%.

International oil prices are declining on news of ceasefire negotiations between Israel and the Palestinian militant group Hamas. West Texas Intermediate (WTI) crude fell $0.58 (0.7%) to $83.27 per barrel, and Brent crude, the global oil price benchmark, dropped $0.70 (0.8%) to $88.80 per barrel.