US stock markets delivered a positive session overnight.
As flagged in previous weeks and press conferences, the Federal Reserve voted to approve the ‘scaling back’ of bond purchases that had been central to stabilising the economy during the pandemic.
The board voted to reduce the existing US$120 billion in monthly bond-buying that seeks to keep bond yields and the rates set off them lower, with a cut of US$15 billion from next month.
Chair Powell was quick to reiterate that this is both an important step but also not an automatic process and continued to point out the role that supply chain issues, rather than demand, are playing in the current transitory inflation.
Markets rallied on the news with the Nasdaq gaining most, up 1%, followed by the S&P 500 and Dow Jones, up 0.6% and 0.3%, respectively.
Activision & Zillow shares sold off on operational challenges
Earnings season turned negative after Activision Blizzard (NASDAQ: ATVI), which makes popular video games including Call of Duty, announced a number of titles will be delayed. Activision shares fell 14%.
It was a similar story for Zillow (NASDAQ: Z), a home buying website, which fell 25% after announcing it would cease the practice of flipping homes and refocus on its core business.
US stock market movers
Here’s how other popular US stocks performed on Wednesday.
- Uber (NYSE: UBER) up 6.6%
- T-Mobile (NYSE: TMUS) up 5.3%
- Tesla (NASDAQ: TSLA) up 3.6%
- Upstart (NASDAQ: UPST) down 4.1%
- Paycom (NYSE: PAYC) down 7.4%
- Freshworks (NASDAQ: FRSH) down 14.0%
Back home on local markets, the S&P/ASX 200 (ASX: XJO) is expected to follow US markets higher at the open on Thursday. For a round-up of the latest news, check out my ASX 200 morning report.
