Stocks fall after Powell remarks, as earnings rush in

U.S. stocks sank Wednesday as another bout of earnings results hit traders’ desks, while enthusiasm from the previous session over Federal Reserve Chair Jerome Powell’s embrace of “disinflation” faded.

The S&P 500 (^GSPC) declined 1%, while the Dow Jones Industrial Average (^DJ) edged down roughly 175 points, or 0.5%. The technology-heavy Nasdaq Composite (^IXIC) tumbled 1.4%.

In specific stock moves, Microsoft (MSFT) shares rose 2.7% at the open, building on Tuesday’s 4% advance over enthusiasm for a new version of its Bing search engine running on a more powerful version of OpenAI’s popular ChatGPT natural language AI technology.

Under Armour (UA) was little changed at the open, paring a pre-market gain of as much as 3% after the athletic apparel retailer lifted its profit forecast Wednesday morning, benefitting from discounts during the holiday season.

Uber’s (UBER) stock climbed 6.3% after earnings for the last three months of 2022 beat expectations and CEO Dara Khosrowshahi said the company was focused on achieving profitability in 2023 as post-pandemic demand for ride-hailing recovers.

Shares of Chipotle (CMG) sank 4% during the open after the burrito-maker’s earnings disappointed as higher costs for tortillas, dairy, beans and rice, as well as labor costs, ate into profitability.

CVS Health (CVS) shares rose nearly 4% in extended trading after the pharmacy chain announced it has agreed to buy Oak Street Health in a $10.6 billion deal, marking its second big acquisition in the health-care space in the past two years.

WASHINGTON, DC – FEBRUARY 07: Federal Reserve Board Chairman Jerome Powell speaks in an interview with David Rubenstein. (Photo by Julia Nikhinson/Getty Images)

The moves Wednesday morning come after investors cheered remarks from Powell at a speaking engagement in Washington, D.C., in which he embraced the presence of “disinflation” in the U.S. economy. On Tuesday, the S&P 500 gained 1.3%, the Dow 0.7%, and the Nasdaq 1.9%.

DataTrek’s Nicholas Colas notes that Powell’s comments did not sway the market’s expectations of the likely path of monetary…


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