S&P 500 Slides as Fed Holds Rates Steady; Moderna and Starbucks Steal the Spotlight
On Wednesday, January 29, the S&P 500 edged 0.5% lower as investors digested the Federal Reserve’s decision to maintain interest rates. While the move was widely anticipated, the market showed mixed reactions amid corporate earnings reports and concerns about future economic policies.
Moderna and Packaging Corporation of America Drag Down Index
Shares of Moderna took a heavy hit, plunging 9.4%, following a downgrade by Goldman Sachs. The investment firm reduced its rating from "buy" to "neutral" and cut the price target, citing uncertainty around revenue prospects for Moderna’s respiratory vaccine business. Analysts also raised concerns about high operating expenses.
Packaging Corporation of America also weighed on the S&P 500, falling 9.8% after issuing lower-than-expected profit guidance. Despite exceeding revenue estimates, the company struggled with rising costs and seasonal challenges, leading to weaker earnings.
Bright Spots: Starbucks and T-Mobile Rally
On the positive side, Starbucks saw its stock climb 8.1% after surpassing quarterly sales and profit expectations. CEO Brian Niccol highlighted progress in the company’s turnaround strategy, which includes streamlining menu items to enhance efficiency.
T-Mobile shares also surged 6.3% following better-than-expected earnings and subscriber growth. The telecom giant reported record-low churn rates and strong financial performance, echoing recent successes from competitors Verizon and AT&T.
Market Overview
The Nasdaq mirrored the S&P 500 with a 0.5% drop, driven by underperformance in the tech sector. Meanwhile, the Dow Jones Industrial Average slipped 0.3%. Investors remain cautious as they await earnings reports from major tech firms and further clarity on the Federal Reserve’s economic outlook.
Fed Chair Jerome Powell emphasized a “wait-and-see” approach, noting that officials are evaluating the impact of new government policies on the economy. This measured stance leaves markets bracing for potential shifts in monetary policy later this year.
Despite some standout performers like F5, which surged 11.4% on robust earnings, the broader market struggled to gain momentum. Investors continue to balance corporate earnings results with ongoing concerns about inflation and economic growth.
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