- U.S. equities posted losses on May 3, 2023, after the Federal Reserve raised interest rates but suggested that it may hit the brakes on its hiking cycle.
- The Dow turned in the worst performance of the major indexes, sinking 0.8% in Wednesday's session, while the S&P 500 and the Nasdaq were down 0.7% and 0.5%, respectively.
- Shares of pharmacy chains CVS Health (CVS) and Walgreens Boots Alliance (WBA) slipped following reduced guidance by CVS.
U.S. equities dropped after the Federal Reserve hinted that it may take a pause in raising interest rates to fight inflation after lifting borrowing costs for the 10th time in just over a year. However, Fed Chair Jerome Powell noted that policymakers did not make a decision on ending hikes just yet. The Dow, S&P 500, and Nasdaq all closed near their lows for the day. The yield on the 10-year Treasury note fell.
Shares of regional banks sank following the Fed decision. Walgreens Boots Alliance (WBA) was the worst-performing stock in the Dow after the biggest U.S. pharmacy chain's rival, CVS Health (CVS), cut its 2023 guidance. CVS Health shares dipped as well. Shares of Estee Lauder (EL) led the S&P 500 lower after the cosmetics giant also slashed its full-year forecast, citing a less-than-anticipated rebound in demand in its key China market.
Starbucks (SBUX) shares declined when the biggest coffee retailer didn't raise its outlook after reporting strong quarterly results. Advanced Micro Devices (AMD) warned that weak PC sales will impact its revenue, and shares slid. Yum! Brands (YUM) shares tumbled as the fast-food chain operator's profit missed expectations.
Generac Holdings (GNRC) shares rose after the maker of generators and other alternative energy products exceeded earnings and revenue forecasts. Clorox (CLX) also beat profit and sales estimates, sending shares of the cleaning products manufacturer up. Assurant (AIZ) shares advanced as the insurance firm reported better-than-expected earnings.
Shares of Eli Lilly (LLY) rose after the drugmaker said a large-scale study found that patients taking its experimental Alzheimer's treatment showed slowing cognitive decline. Kraft Heinz (KHC) shares gained as the packaged food provider boosted its full-year profit outlook.
Oil futures dipped almost 5% on worries that rising interest rates will limit economic expansion. Gold and silver prices gained. The U.S. dollar lost ground to the euro, pound, and yen. Most major cryptocurrencies traded lower.