Microsoft Corp MSFT shares are trading lower by 2.2% to $310.45 going into the close of Tuesday’s session. The stock is falling amid overall market weakness as traders and investors weigh concerns about future rate hikes following last Wednesday’s FOMC statement and lower-than-expected initial jobless claims data.
Why It Matters
Like most companies, Microsoft carries debt and relies on financing for various business activities. When interest rates are expected to rise, the cost of borrowing increases. This can result in higher interest expenses for Microsoft, potentially reducing its profitability and causing investors to reevaluate the stock’s value.
See Also: Microsoft’s Vision For AI’s Future Is Harnessing Nuclear Power
Higher interest rates can also make bonds and other fixed-income investments more attractive compared to stocks, leading some investors to shift their portfolios away from equities.
What’s Going On?
The Federal Reserve last week maintained the federal funds rate within the 5.25% to 5.5% range at its September meeting in a unanimous move.
The September dot plot reveals the median preference for the fed funds rate at the close of 2023 remains unwavering at 5.6%. This figure mirrors projections made back in June, hinting at the possibility of one more rate hike during either of the last two meetings this year…Read More
According to data from Benzinga Pro, MSFT has a 52-week high of $366.78 and a 52-week low of $213.43.
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