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US market close: Market sinks on Fed reflection

By Joseph Toppe

21:44, 16 December 2021

City skyline with stock illustration overlaid
Bank stocks soared today - Photo: Shutterstock

A day after staging a late session rally on the US Federal Reserve’s decision to speed up its tapering strategy, Wall Street ended Thursday with the major US benchmarks trading in the red.

The S&P 500 fell 1.1% lower after closing just below a record yesterday, while the Nasdaq Composite went down 2.8%, while the Dow Jones Industrial Average lost 109 points after rising over 200 points for a session high.

Halfway through the session, the Dow Jones Industrial Average was up near 0.40%, the S&P 500 was swaying between small gains and losses, while the Nasdaq Composite was around 1.09% in the red.

Traders start sell-off day after Fed meeting

Yesterday, the US Federal Reserve announced plans to double its tapering pace to $30bn per month to cool down the record inflation.

The Federal Open Market Committee ended its two-day meeting on Wednesday by accelerating its reduction of Treasury and mortgage security purchases and putting it on a path to zero out new purchases by March.

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Winners and losers: Bank stock soars

Shares of Advanced Micro Devices sank 5.8%, while shares of Nvidia plummeted 7.3% in the red.

Shares of JPMorgan are up 1.56%, shares of Goldman Sachs are also up at almost 2% in the green, while shares of Bank of America are surging over 2.41% after analysts at JPMorgan named the stock a top pick for 2022.

In other banking stock, shares of Wells Fargo are 2.74% higher and shares of Citigroup are 1.38% in positive territory.

Tech shares continue to take a beating after spiking higher yesterday.

AUD/USD_zero

0.66 Price
-0.640% 1D Chg, %
Long position overnight fee -0.0065%
Short position overnight fee -0.0017%
Overnight fee time 21:00 (UTC)
Spread 0.00030

EUR/USD

1.09 Price
+0.030% 1D Chg, %
Long position overnight fee -0.0087%
Short position overnight fee 0.0005%
Overnight fee time 21:00 (UTC)
Spread 0.00040

USD/JPY

156.97 Price
-0.380% 1D Chg, %
Long position overnight fee 0.0109%
Short position overnight fee -0.0191%
Overnight fee time 21:00 (UTC)
Spread 0.080

AUD/USD

0.66 Price
-0.640% 1D Chg, %
Long position overnight fee -0.0065%
Short position overnight fee -0.0017%
Overnight fee time 21:00 (UTC)
Spread 0.00030

On Thursday, shares of Adobe have dropped 10.19% after showing an underwhelming quarterly report.

In other tech stock, shares of Apple dropped near 3.93%, shares of Meta Platforms are 1.98% lower, and shares of Microsoft and Amazon are trading down 2.91% and 2.56% respectively.

Oil: Crude prices hit milestone

Oil futures rose on Thursday, settling around a three-week high.

West Texas Intermediate crude for January delivery went up $1.51, or 2.1%, to settle at $72.38 a barrel on the New York Mercantile Exchange, the highest finish for a front-month contract since 24 November, while February Brent crude, the global benchmark, tacked on $1.14, or 1.5%, at $75.02 a barrel on ICE Futures Europe.

Gold: Metal rises as dollar devalues

Gold futures are up as the US dollar weakens in the wake of the Federal Reserve’s two-day policy meeting.

February gold added $33.70, or 1.9%, to settle at $1,798.20 an ounce after touching an intraday high of $1,800.60, while March silver increased 94 cents, or 4.4%, to settle Thursday at $22.485 an ounce, following a 1.7% decline a day ago.

Forex: US buck loses step

On Thursday, one US dollar equals 0.88 of the euro, after making up 0.89 of the currency yesterday. The US dollar also lost ground on the Canadian dollar, going from 1.29 on Wednesday to 1.28 on Thursday.

Yields on 10-year Treasury notes went up to 1.422% on Thursday.

Read more: Roblox (RBLX) stock down 18% amid user safety concerns

Markets in this article

ADBE
Adobe Systems Inc (Extended Hours)
555.63 USD
3.29 +0.600%
AMD
Advanced Micro Devices Inc (Extended Hours)
154.40 USD
2.92 +1.930%
AMZN
Amazon.com Inc (Extended Hours)
182.93 USD
0.12 +0.070%
AAPL
Apple Inc (Extended Hours)
224.10 USD
-0.44 -0.200%
BAC
Bank of America Corp (Extended Hours)
42.29 USD
-0.47 -1.100%

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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.
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