Nasdaq Stock Falls As Biden Nominates Powell For Fed’ Chair

Nasdaq Stock

On Monday, at the start of a holiday-shortened week, stocks closed a rough afternoon neutral. Traders predicted Federal Reserve Chair Jerome Powell’s re-appointment to the top job at the central bank.

The Dow added 328 points, or 0.9 percent, to finish only marginally higher at session highs. After soaring to a new intraday high earlier in the session, the S& P 500 finished down, with technology firms underperforming and erasing earlier gains. After beginning higher, the Nasdaq deflated and fell more than 1%.

President Joe Biden revealed on Monday that he was proposing Federal Reserve Chair Jerome Powell for a second term as the central bank’s chairman. This put an end to weeks of speculation over who would be chosen. Following the announcement, financial stocks soared.

Powell or current Fed Governor Lael Brainard was believed to be Biden’s choice for Fed chair. The Senate Banking Committee will consider Powell’s nomination, and if confirmed, he will serve another four-year term. Powell led the Fed throughout the COVID-19 period. He will now be assisting the Fed in determining whether the economy has developed sufficiently to sustain a deeper decrease in monetary policy assistance.

Outlook on the stock market with the reelection of Powell

More inflation data will likely come this week. The upcoming data will offer more insight into whether the Fed may need to intervene sooner rather than later to bring high prices under control. The Fed’s preferred inflation indicator is the PCE index. According to the Bureau of Economic Analysis, this index should show a 4.1% rise over the last year. This would be the most significant yearly increase in over three decades.

Stocks rose on Monday due to optimism on new deal-making activity in a variety of industries. Constellation Brands, the manufacturer of Corona beer, is considering a merger with Monster Beverage, a Coca-Cola-backed energy drink firm. KKR & Co., a private equity firm, launched a $12 billion proposal to take Telecom Italia private, sending the Italian telecommunications giant’s stock substantially higher.

 

 

 

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