The Dow Jones does not raise its head: pressure on bonds increases after Powell's warnings

The futures linked to the DOW JONES fell 0.27% to 33,456 points, while those of the S&P 500 lost 0.30%, to 4,290 points. NASDAQ 100 futures fell 0.38% to 14,832 points.

These movements come from a very volatile session on Thursday that ended up dyed red. The Dow Jones lost 250.91 points, or 0.75%, while the S&P 500 fell 0.85%. The Nasdaq fell almost 1%.

Major indices are also on track for losses during the week. The S&P 500 is down 1.2% through Thursday's close, while the Nasdaq is down 1.7%. The Dow Jones is down almost 0.8%.

Investors today continue to digest the conference given by the president of the Federal Reserve, Jerome Powell, yesterday in New York . The top U.S. policymaker said inflation remains too high and slower economic growth will likely be needed to bring it down. Powell also said he doesn't think rates are too high now.

“While the road is likely to be bumpy and take some time, my colleagues and I are united in our commitment to sustainably reduce inflation to 2% ,” he added.

Although Powell did not commit to a path forward for rates during his speech, the market seems to think the central bank will skip a hike in November. Fed funds futures prices reflect a 92% probability that the central bank will keep rates the same at the conclusion of its November meeting, according to the CME FedWatch tool.

“Powell gave some of 'lime' and others of 'sand',” explains Juan J. Fernández Figares, of Link Gestión. “Thus, at the beginning of the meeting, Powell came to rule out the need for the Fed to carry out new increases in official rates by pointing out that financial conditions had become more restrictive due to the rise in bond yield markets. in the long term, as well as the fact that inflation in recent months had behaved satisfactorily. However, he later explicitly re-linked a stronger economy to higher interest rates and for longer.” ...

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