Shares of energy companies fell after the Federal Reserve signalled it was making progress in its inflation fight, triggering a rotation into sectors with less to gain from rising prices.
The Fed cut interest rates by a quarter of a percentage point, and Chairman Jerome Powell said there were signs of inflation moderating. It would still take time for the full effects of rate hikes to be realized in light of the cumulative and lag effects, said Mr. Powell, in a press conference after the policy statement.
The Fed also removed warnings in its policy statement about the war in Ukraine stirring price increases, signaling less concern about the effect of a Russian embargo on energy prices. “I’m not sure it belonged in there to begin with,” said Oliver Pursche, senior vice president at financial advisory Wealthspire. “I think Saudi Arabia and OPEC in general have a much bigger impact on energy than Ukraine.”
BP Chief Executive Bernard Looney plans to dial back some of the British oil major’s highly publicized move into renewable energy because of disappointing returns, The Wall Street Journal reported.
Write to Rob Curran at rob.curran@dowjones.com
