Stocks fell sharply into the red on Wednesday, with the Dow Jones Industrial Average marking its first decline of the year despite setting another intraday high earlier in the session, as investors digested the latest details of the Federal Reserve's monetary policy moving into the new year. The Dow fell nearly 400 points, while the Nasdaq and S&P 500 both plunged about 3% and 2% lower, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Fed minutes reveal possible balance sheet reductions this year:
The Federal Reserve released meeting minutes from its December policy meeting Wednesday afternoon, revealing that the central bank discussed reducing its balance sheet shortly after it raises interest rates later this year.
The Fed is currently tapering its bond purchases and has already indicated that it will raise rates soon after it completes that taper in March. However, Wall Street was not prepared for the Fed to start reducing its nearly $9 trillion balance sheet made up of Treasuries and mortgage-backed securities; the meeting minutes showed that the central bank could start reducing its balance sheet as soon as 2022.
"Almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate," the meeting minutes stated.
Stellantis, Amazon partner on software and cloud-based services:
Stellantis
Amazon and Stellantis will work together on STLA SmartCockpit software that will be included in millions of vehicles starting in 2024 as part of the companies' multi-year cloud deal, according to a press statement. The new software will incorporate Amazon's Alexa voice assistant, e-commerce, maintenance, navigation, along with other elements.
Additionally, Amazon Web Services (AWS) will become Stellantis' preferred cloud provider for vehicle platforms, with the carmaker moving its vehicle data pipeline to AWS.
U.S. private employers added back more jobs than anticipated in December:
U.S. employers in the private sector added back far more than expected jobs in December, signaling some much needed relief for the sector that has been plagued with widespread job vacancies across the economy due to the pandemic's impact.
U.S. private payrolls grew by 807,000 for the last month of the year, according to ADP's latest report published Wednesday. That print was nearly double the 410,000 consensus economists expected and well above the 505,000 jobs added in November, according to ADP's revised estimates.
Here's how market benchmarks started trading soon after opening bell:
S&P 500 Index: -0.13% or -6.35 points to 4,787.19
Dow Jones Industrial Average: -0.03% or -10.76 points to 36,788.89
Nasdaq Composite Index: -0.47% or -69.27 points to 15,548.99
