The cost of borrowing money in the United States is increasing because of what Jerome Powell said. Also, people are worried about what is happening in the Middle East.
When the day begins on Wall Street, there is a feeling of getting ready. The cost of borrowing money in the United States is rising. This is because the person who helps decide on the money, Jerome Powell, talked about it. He said this is because the economy is strong and there are not many people looking for jobs. This means they could make it a little harder for people and businesses to borrow money so that the prices of things don’t rise too quickly.
At the same time, people are closely following what is happening in the Middle East. There are a lot of problems there, especially in a place called Gaza. Israel is doing something very big there. They even reached a special building where people were trying to be safe. This shows that they are preparing to send soldiers to Gaza soon.
Robert Pavlik, who knows a lot about money, said: “It’s good news that they won’t make loans more expensive in November.” But he also said borrowing could become a little more expensive down the road because the economy remains strong and prices are rising.
Lorie Logan, another person who knows about money, said that because borrowing costs have increased and the numbers in the reports are not bad, the people in charge of money can take their time deciding what to do next.
A large company that analyzes what happens with money, BofA Global Research, believes that the US government will decide to make borrowing a little more expensive in December, not in November as some previously thought.
People will also listen to what other top money people, like Patrick Harker and Loretta Mester, have to say. But after this week, they won’t say much because they will have a time when they won’t talk to the media.
There’s something called the 10-year Treasury yield. It’s like a score that shows how much the government has to pay when it borrows money over ten years. This score increased a lot and even surpassed 5%, something that hasn’t happened since a long time in 2007. Right now, it’s a little lower than that, but it’s still pretty high.
People guessing what will happen to borrowing costs say there is almost 99% certainty that the government will not change borrowing costs in November. But they believe there could be a pause in December, with a 75% chance.
On Thursday, the big numbers showing how well big companies are doing were down almost 1%. If they continue like this, it will be a week in which they did not do very well.
Some companies that work with oil and machines made their numbers. One of them, SLB, did better than people thought, but even so, the amount of money people want to give for its shares fell 2.6%.
At a certain time, before the day begins, people look at how the stocks of large companies are doing. Right now, the Dow Jones, which is a special way of looking at all these big numbers, is down 110 points. The S&P 500, which is another special way to look at it, is down 16 points. And the Nasdaq 100, which tracks some of the biggest companies, is down 68 points.
There are also companies that make things that use the sun to generate energy. One of them, SolarEdge, said they won’t make as much money as they thought in the latter part of the year. Because of this, people don’t want to give as much money for their shares, so they went down a lot, 30.1%. Other companies like Enphase Energy and First Solar didn’t fare as well either, falling 14.9% and 3.6% respectively.
A company that makes special machines for doctors, Intuitive Surgical, didn’t do so well either. The amount of money they made was less than people thought, so their shares fell 5.5%.
But a company called Comerica, which manages money in part of the United States, fared a little better. They said that although they may not make as much money on the interest people pay them, they are still doing well and because of this people want to give them more money for their shares, so they are up 1.2%.
Also read: Stock Market Sees Small Gains as Interest Rates Rise