WASHINGTON: US Stocks on Wall Street opened slightly lower Wednesday, curtailing a market rally fueled by hopes of interest rate cuts that lifted the Dow Jones Industrial Average to an all-time high.
Earlier this month, the US Federal Reserve held its key lending rate steady and penciled in three rate cuts in 2024 amid a steep drop in inflation, sparking a flurry of enthusiastic trading.
But with less trading activity coming up between Christmas and New Year, traders appear to be locking in their gains now.
Wall St climbs as rate-cut optimism lingers
“We are getting close to the beginning of the holiday period,” CFRA chief investment strategist Sam Stovall told AFP.
“More and more traders are taking time off, and they’re probably squaring positions, they are taking some profits,” he added.
Around 10 minutes into trading, the Dow Jones Industrial Average was down 0.2 percent at 37,477.48, while the broad-based S&P 500 fell 0.1 percent to 4,764.08.
The tech-rich Nasdaq Composite Index opened lower before recovering some ground to trade roughly flat at 15,007.92.
Among individual stocks, parcel delivery giant FedEx saw its stock drop more than 10 percent after lowering its revenue forecast.
And the professional services firm Aon saw its share price plummet 6.7 percent after announcing it was acquiring middle-market insurance broker NFP.
“The market is very overvalued on a short term basis,” Stovall said. “And as a result, I think investors are just digesting some of those gains taking some of those profits.”
“But the market could surprise us and close higher on the day, nonetheless,” he added.
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