All Except Tech Shares Awaiting Powell’s Statements

Tech shares investors are not waiting around for Powell to tell what economist and traders already know: The Fed is about to get very serious about inflation. The remainder of the market is waiting and holding their breath.

The Dow Jones Index is flat. The S&P 500 is down just 0.2%. The Nasdaq is down a little less than 1%. Investors know what Fed Chair Jerome Powell is about to say: The Fed is walking a tightrope, trying to balance an economic recovery in peril with surging prices.

Rising COVID cases are not helping the US economy. Neither is the supply chain crisis or a labor shortage. The Fed believes the economy still has plenty of juice left to squeeze, and it’s hinted very strongly that it will speed up its wind-down of pandemic-era emergency stimulus.

That is not such great news for tech companies, which have relied on surging earnings growth to justify high valuations. Higher rates could eat into profit, making value stocks more attractive.

Less than an hour away from the Federal Reserve’s monetary policy update, and investors are anxiously awaiting the announcement on a really momentous Fed’s day and highly expected accelerated taper, but today will be about more than just how much the Fed will accelerate ending its pandemic-era stimulus program.