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US markets end lower after Powell emphasizes ‘wait-and-see’ stance on rates

26 Jun 2019 Evaluate

The US markets ended lower on Tuesday  after Federal Reserve Chairman Jerome Powell said the central banks was still monitoring the economy for signs of weakness and would seek to avoid a knee-jerk reaction in terms of cutting benchmark interest rates. Sentiments remained weak after a report released by the Commerce Department unexpectedly showed a steep drop in new home sales in the US in the month of May. The Commerce Department said new home sales plunged by 7.8 percent to an annual rate of 626,000 in May after tumbling by 3.7 percent to a revised rate of 679,000 in April. Street had expected new home sales to climb by 1 percent to a rate of 680,000 from the 673,000 originally reported for the previous month. The unexpected drop in new home sales came as sales in the West plummeted by 35.9 percent to a rate of 125,000 and sales in the Northeast showed a 17.6 percent nosedive to a rate of 28,000.

Besides, reflecting the escalation in trade and tariff tensions earlier this month, the Conference Board released a report showing a substantial deterioration in US consumer confidence in the month of June. The Conference Board said its consumer confidence index tumbled to 121.5 in June from a downwardly revised 131.3 in May. Street had expected the index to dip to 132.0 from the 134.1 originally reported for the previous month. With the much steeper than expected drop, the consumer confidence index slumped to its lowest level since hitting 120.6 in September of 2017.

Dow Jones Industrial Average dropped 179.32 points or 0.67 percent to 26548.22, Nasdaq declined 120.98 points or 1.51 percent to 7884.72 and S&P 500 was down by 27.97 points or 0.95 percent to 2917.38.

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