LIVE MARKETS-A hawkish Fed pivot?

Nasdaq slides ~2%, S&P 500 down ~1%, Dow off ~0.3% Tech weakest S&P 500 sector; Energy leads gainers Euro STOXX 600 index edges red Dollar gains; crude up >3.5%; gold down >1.5%; bitcoin slides >5.5% US 10-Year Treasury yield edges down to ~4.24% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at A HAWKISH FED PIVOT? The Federal Reserve adopted a more hawkish tone in comments on Wednesday, according to Bank of America, with policymakers taking a more optimistic view of the labor market and Fed Governor Michelle Bowman not dissenting against the decision to keep rates on hold. Bank of America economists say that they found three major surprises in the January FOMC statement, supporting their view of “a significant hawkish pivot.” First, the Fed emphasized the December unemployment decline, noting “the unemployment rate has shown some signs of stabilization.” Second, the committee removed language stating it “judges that downside risks to employment rose in recent months.” Third, Bowman did not dissent in favor of a rate cut, contrary to the bank’s expectations. Fed Chair Jerome Powell’s comments on the labor market also echoed the statement’s optimism, though he noted some pockets of concern, the economists added. On the dovish side, Powell said the Fed can loosen policy if inflation declines as expected—suggesting he still views policy as restrictive. Notably, he didn’t link stronger productivity growth to a higher neutral rate. “At any rate, we think the Fed’s labor views come March will be dictated by the next two jobs reports,” Bank of America said. The economists expect two 25-basis-point cuts, coming in June and July, after a new Fed Chair is appointed. But this will depend on the composition of the FOMC. “Powell’s decision on whether to stick around as a Governor is a big part of that. We see a rising risk that he will stay,” they said. (Karen Brettell) EARLIER ON LIVE MARKETS: THURSDAY DATA PARADE: STEADY CLAIMS, SOLID FACTORY ORDERS, BIGGEST TRADE DEFICIT JUMP SINCE 1992 CLICK HERE NASDAQ FALLS MORE THAN 1% AS MICROSOFT DISAPPOINTS CLICK HERE HOW COULD A LOWER US DOLLAR IMPACT EARNINGS? CLICK HERE DOW INDUSTRIALS SO FAR FADING SHY OF 50,000 CLICK HERE WINNERS AND LOSERS FROM AI-DRIVEN COMMERCE CLICK HERE OIL AND THE EURO, SWINGS AND ROUNDABOUTS FOR THE ECB CLICK HERE GOLD OVERHEATS: FROM RALLY TO MANIA? CLICK HERE CHIPS AND MINERS HELP STOXX OFFSET SOFTWARE GLOOM CLICK HERE BEFORE THE BELL: EARNINGS RAMP UP, SAP DRAG FOR THE DAX CLICK HERE BUILDING AI SURE DOES COST A LOT, HOPE IT’S WORTH IT CLICK HERE