July 19, 2024

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Dow Jones down 300 points as congressional control remains unclear

Dow Jones down 300 points as congressional control remains unclear

Stocks fell on Wednesday – after recent market gains – as a result of midterm elections No clear answers have been given about who will control Congress yet.

The Dow Jones Industrial Average fell 325 points, or about 0.9%. The S&P 500 fell 0.9%, and the Nasdaq Composite fell 1.3%.

Stocks have been swinging on three straight days of election gains, as Wall Street had been expecting Republicans to gain ground and block any future tax and spending plans.

But control of Congress was not clear. NBC News had not yet offered control of the House of Representatives with NBC’s estimate that Republicans could win 221 seats, which would be a slim majority.

In one of the major races that could determine the Senate’s control, Democrat John Fetterman defeated Republican Mehmet Oz for the pivotal Pennsylvania Senate seat, according to an NBC News projection. Oz had the support of former President Donald Trump, who endorses his two candidates Experienced intermittent levels of success across the country.

Meanwhile, the pivotal Georgia Senate race is between Democratic Senator Raphael Warnock and former NFL player Herschel Walker. He will head to the run-off on December 6According to Secretary of State Brad Ravensberger. The crucial Senate race in Nevada has yet to be resolved.

“The election outcome remains uncertain, but the red wave predicted by models, investors and betting markets did not materialize and, in the near term, will add to the already high volatility,” Denis Debucherie wrote in a note on Wednesday.

While the election caught the market’s attention, investors may want to move forward now that the Federal Reserve is raising interest rates to bring down inflation, which could push the economy into recession.

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headline inflation report

Investors are awaiting the October CPI report, due Thursday morning at 8:30 AM ET.

Economists polled by Dow Jones expect the core CPI to grow 7.9% from a year earlier, down Slightly off September’s 8.2% gain. Excluding volatile food and energy prices, economists expect the consumer price index to have grown 6.5% year-over-year in October, compared to 6.6% in September.

The report could give some insight into how the Fed can continue to move forward. Just last week, The central bank raised the short-term borrowing rate by 0.75 percentage points – the fourth consecutive rise of this magnitude – in its latest attempt to stamp out inflation.

“Inflation is the Fed’s number one enemy, and if you see core CPI rising, I think the market will have a negative reaction to that,” AllianzIM’s Johan Grahn said.

Elsewhere in the market, Facebook’s parent shares meta pads It rose 3% after the social media giant announced that it was laying off more than 11,000 workers. Founder and CEO Mark Zuckerberg said he was too optimistic about growth and now needed to streamline the company.

One of the stocks that affected the markets was Disney, which decreased more than 11% After the entertainment giant miscalculated on its upper and lower lines fiscal fourth quarter.