The Fed is on the defensive due to COVID-19 rising cases
Yesterday the Federal Reserve decided to keep interest rates even while taking a dovish outlook regarding the coronavirus-hit economy.
In a move that was broadly foreseen, the central bank held its benchmark overnight lending rate attached near zero, the same level that has been fixed since March 15 at the beginning of the COVID-19 outbreak.
Accompanying the low rate levels, the Federal Open Market Committee, which is responsible for deciding the fate of the monetary policy, demonstrated its dedication including maintaining its bond investing and the program for liquidity programs further connected with the virus response. Fed Chairman Jerome Powell said, “We are committed to using our full range of tools to support our economy in this challenging environment”.
Gold retraced due to improved investor outlook
Gold prices trimmed below today while investors’ desire for riskier assets seem to have increased following the Federal Reserve promise to help the coronavirus-battered U.S. economy. However, a softer greenback curbed damages to the popular yellow metal.
Spot gold dropped 0.3% to $1,964.51 per ounce following an increase of 1% in the previous session. U.S. gold futures climbed 0.3% to $1,959.60.
Oil fell due to surge in COVID-19 cases
Oil prices dropped early today as a wave of coronavirus contaminations around the world seems to have increased concerns regarding a drop in fuel requests, while major oil producers are ready to start raising the production in August. U.S. West Texas Intermediate (WTI) crude futures dropped 6 cents, to $41.21 a barrel while Brent crude futures fell 7 cents, to $43.68 a barrel. Both benchmarks floated near fixed levels following a jump last Wednesday after the U.S. Energy Information Administration announced a surprising 10.6-million-barrel decline in crude stockpiles last week.
Dow gained more than 100 points
Yesterday U.S Stocks advanced while technology shares led the increase and as the Federal Reserve maintained interest rates stable.
The Dow Jones Industrial Average gained more than 160 points, to conclude at 26,539.57. The S&P 500 rose 1.3% to 3,258.44 while Nasdaq Composite improved 1.4% to 10,542.94.
Facebook and Amazon each grew more than 1% along with Apple and Alphabet.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.