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US English

US market close: All eyes on Fed as US stocks turn lower

By Joseph Toppe

21:20, 5 January 2022

US Federal Reserve logo
Minutes from the 14 and 15 December US Federal Reserve meeting are affecting stock prices - Photo: Shutterstock

It is a red coloured day on Wall Street as investors digest the minutes from the US Federal Reserve’s open market committee meeting held last month.

Throughout trading on Wednesday, the Dow Jones Industrial Average lost 255 points, or 0.6%, the S&P 500 fell 1.2%, while Nasdaq Composite dropped 2.4%.

Fed minutes reveal aggressive strategy

The US Federal Reserve met last month to determine whether the central bank's low interest rate policies were still needed.

In an interview with Capital.com, Edward Moya, senior market analyst for OANDA in New York, said “The Fed minutes signalled a more hawkish policy with faster rate increases and much quicker balance sheet runoff.”

“Wall Street has benefitted from the Fed and US government’s monetary and stimulus response, but that is being taken away,” he went on. “The market will now have to focus on economic growth and trading on valuations, and that outlook over the long term is looking less attractive.”

“As we start to price in more fed rate increases, re-hikes, and balance sheet reductions, treasury yields will continue to rally and that will dampen profitability and growth forecasts moving forward.”

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Winners and losers: Tech shares bottom out

Shares of Advanced Micro Devices (AMD) are off 5.74%, while Nvidia sank 5.76% and Intel slipped 0.13%.

In other tech stock, shares of Apple are down 2.66%, Meta Platforms is down 3.67%, as Microsoft fell 3.84% lower and Amazon went down 1.69%.

US100

19,802.00 Price
+1.430% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

US500

5,564.40 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.5

HK50

17,724.00 Price
+1.700% 1D Chg, %
Long position overnight fee -0.0238%
Short position overnight fee 0.0018%
Overnight fee time 21:00 (UTC)
Spread 30.0

DE40

18,491.70 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0214%
Short position overnight fee -0.0008%
Overnight fee time 21:00 (UTC)
Spread 8.0

With rising Omicron cases around the globe, shares of Pfizer are 1.97% higher after Bank of America upgraded the company saying the vaccine-maker's profits from Covid treatments offer stock upside.

Meanwhile, shares of Moderna have plummeted to 7.65% in the red, as Johnson & Johnson moved higher by 0.66%.

Oil: Crude ends at six-week high

Oil futures went up on Wednesday with West Texas Intermediate crude for February delivery spiking 86 cents, or 1.1%, to settle at $77.85 a barrel on the New York Mercantile Exchange, while March Brent crude tacked on 80 cents, or 1%, to $80.80 a barrel, representing the highest settlement since 25 November.

In energy stock, shares of Hess slipped 0.31%, Chevron is 0.63% higher, while Exxon Mobil is 1.22% in the green and ConocoPhillips is 1.71% lower.

Gold: Yellow metal rises for second straight day

Gold futures traded higher as February gold jumped $10.50, or 0.6%, to settle at $1,825.10 an ounce, following a 0.8% pop yesterday, while March silver went up 11 cents, or 0.5%, to settle at $23.17 an ounce.

Silver added 1.1% on Tuesday.

Forex: US buck loses step on euro again

On Wednesday, one US dollar equals $1.27 of the Canadian dollar and $0.88 of the euro, after briefly reaching $0.89 of the European currency yesterday.

Read more: Natural gas futures higher amid a winter freeze

Markets in this article

AMD
Advanced Micro Devices Inc (Extended Hours)
154.80 USD
3.36 +2.220%
AMZN
Amazon.com Inc (Extended Hours)
183.05 USD
0.14 +0.080%
AAPL
Apple Inc (Extended Hours)
224.20 USD
-0.45 -0.200%
CVX
Chevron
157.08 USD
-2.23 -1.400%
CVX
Chevron
157.08 USD
-2.23 -1.400%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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