US stocks end mixed, while Snowflake shares soar on debut

Major stock indexes in the United States posted a mixed finish on Wednesday, after the US Federal Reserve signalled to investors that interest rates could remain low for years.

The Dow Jones Industrial Average closed up 0.13 percent at 28,032.38 in New York.

But weakness in big tech shares saw the S&P 500 – a gauge for the health of US retirement and college savings reports – close down 0.46 percent at 3,385.49, and the Nasdaq Composite Index finish the session 1.25 percent in the red.

The highlight of Wednesday’s session came courtesy of Warren Buffett-backed Snowflake Inc’s shares, which more than doubled in value in a stunning debut on Wall Street. The data warehouse company raised over $3bn in the largest US initial public offering (IPO) of 2020. Shares skyrocketed as much as 166 percent to a session-high peak of $319.

As expected, Federal Reserve policymakers ended their two-day policy meeting on Wednesday by keeping interest rates steady. The Fed also changed its forward guidance to reflect its more dovish stance on inflation, signalling that its benchmark interest rate could remain near zero through 2023.

During his post-meeting press conference, Fed Chairman Jerome Powell said that the outlook for the US economy remains “extraordinarily uncertain” and will largely hinge on whether the coronavirus pandemic remains in check.

Optimism for a quick post-coronavirus economic recovery got another cold dose of reality on Wednesday after the US Department of Commerce reported that consumer spending, the heartbeat of the US economy, decelerated for a third consecutive month.

Consumers have grown more cautious as negotiations in Congress have stalled over a new round of virus relief aid.

If the deadlock continues in the coming weeks, the economy could see a further cutback in spending, particularly from the lowest-income families.

On that front, the Fed chief pledged “to not lose sight of the millions of Americans who remain out of work”.

The US unemployment rate has fallen dramatically from April’s 14.7 percent peak, registering at 8.4 percent in August.

The Fed sees the jobless rate coming down to 7.6 percent by the end of this year, but that is still nearly double February’s pre-pandemic rate of 3.5 percent.

The high-level of joblessness has been especially severe for lower-wage workers in the services sector, women, African Americans and Hispanics.

Among stocks making headlines, Facebook shares finished the session 3.62 percent lower after reports the Federal Trade Commission is preparing a possible anti-trust lawsuit against the social media titan.

Facebook is also in the crosshairs of Kim Kardashian West and other celebrities who are freezing their Facebook and Instagram accounts for one day on Wednesday in support of the #StopHateForProfit campaign to boycott the spread of misinformation.

Shares of Apple Inc closed down 2.95 percent. On Tuesday, the tech giant unveiled a new virtual fitness service and a bundle of all its subscriptions known as Apple One.

FedEx Corp shares closed up 5.75 percent after reporting a bigger-than-expected quarterly profit, driven by price hikes and lower fuel costs.

Shares of Boeing Co closed up 3.97 percent after a US House panel concluded that two 737 MAX crashes were the “horrific culmination” of failures by the planemaker and the Federal Aviation Administration.