Stocks fall ahead of Fed decision | February 1, 2023

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U.S. stocks were lower at Wednesday's open as traders awaited the latest monetary policy decision from the Federal Reserve later in the afternoon afternoon.

Shortly after the opening bell rang on Wall Street, the S&P 500 (^GSPC) was down 0.3%, while the Dow Jones Industrial Average (^DJI) sank by 0.6%. The technology-heavy Nasdaq Composite (^IXIC) fell 0.2%.

On Tuesday, stocks capped off a strong start to the year, with the S&P 500 logging its best January since 2019 while the Nasdaq 100 enjoyed its strongest January rally since 2001, gaining over 10%.

Wednesday's lackluster trading comes ahead of this afternoon's highly anticipated policy announcement from the Federal Reserve, the central bank's first of the year.

Wall Street expects the Fed will announce a 0.25% increase in its benchmark interest rate, marking the second-straight meeting the Fed slows down its pace of interest rate increases.

The Fed's policy statement is due out at 2 p.m. ET, with Fed Chair Jerome Powell set to hold a press conference beginning at 2:30 p.m. ET.

Earnings season also remains in full force, with another disappointing quarter from Snap (SNAP) out last night garnering the most investor attention.

Shares of the social media company were off more than 12% in early trading after the company told investors its internal forecasts assume revenue in its current quarter will fall between 10% and 2% from a year ago.

Match Group (MTCH) and Electronic Arts (EA) shares were also down more than 5% and 11%, respectively, early Wednesday after reporting disappointing quarters on Tuesday afternoon.

Peloton (PTON) shares were up more than 6% early Wednesday after the company reported its cash burn decreased to $94 million in its latest quarter, down from $747 million nine months ago. On an adjusted basis, the company reported $8 million in free cash flow during the holiday quarter.

"If you’ve been wondering whether or not Peloton can make an epic comeback, this quarter's results show the changes we’re making are working," CEO Barry McCarthy wrote in a letter to shareholders.

Wednesday's earnings highlight will come after the market close when Meta Platforms (META) releases its quarterly report.

On the economic data side, new data on private payroll growth from ADP showed private employers added 106,000 jobs last month, fewer than the 170,000 expected by economists.

In its report, ADP said weather impacted its measurement of the labor market, citing floods in California and snow storms in central and eastern parts of the country during the reference week.

"In January, we saw the impact of weather-related disruptions on employment during our reference week. Hiring was stronger during other weeks of the month, in line with the strength we saw late last year," said ADP chief economists Nela Richardson.

Data on job openings for December out Wednesday suggested demand for workers remains robust, as 11 million jobs were available at the end of the month, up from 10.4 million at the end of November.

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