In volatile trade Wednesday, U.S. stocks edged higher, shrugging off earlier losses, ahead of the release of the minutes of the Federal Reserve’s June policy meeting, which will be scrutinized by investors for further clues on the timing of monetary policy tightening as the economy recovers from the pandemic. What are the major indices performing these days?
The Dow Jones Industrial Average DJIA, +0.12% increased 89.57 points, or 0.3 percent, to 34,666 points.
After achieving an intraday record high of 4,357.25, the S&P 500 SPX, +0.25% climbed 12 points, or 0.3 percent, to 4,355.
The Nasdaq Composite Index COMP, +0.09% rose 12 points, or 0.1 percent, to 14,676, after setting a new intraday high of 14,755.33 earlier in the session.
The Dow Jones Industrial Average dropped 208.98 points, or 0.6 percent, to settle at 34,577.37 on Tuesday. The S&P 500 fell 0.2 percent on the day, ending a run of seven consecutive record closing, the longest such run since an eight-day streak ended in 1997. The Nasdaq Composite finished 2021 with a 0.2 percent gain, setting a new high for the year.
What is the market’s driving force? Ahead of the midday release of minutes from the central bank’s mid-June rate-setting meeting, investors were focused on the pace of the US economic recovery and the future of extraordinarily supportive monetary policies. At its June 15-16 meeting, policymakers raised their expectations for a policy interest rate hike and began discussing when it would be acceptable to discuss the unwinding of its $120 billion-per-month asset purchases, which should put downward pressure on Treasury rates. Since the meeting, investors have heard from nearly every Fed official, giving the market a good understanding of where the central bank stands, according to several analysts. The Federal Reserve has indicated that it wants to see more positive monthly employment reports before reducing its monthly Treasury and mortgage-backed securities purchases and hiking interest rates, which are presently at a range of 0% to 0.25 percent. Read more: June jobs report strengthens case for Fed to start tapering bond purchases this year “For starters, we’re still seeking for a definition of what constitutes’significant further advancement in the labor market.’ Gene Tannuzzo, global head of fixed income at Columbia Threadneedle Investments, noted in emailed remarks ahead of the minutes publication, “I’d like to hear how the Fed is framing this up.” “Secondly, we’d like to understand more about the discussion that drove many Fed members to raise their interest rate expectations,” Tannuzzo said, adding that if the Fed becomes more confident in the labor market, “this might startle the market into believing rates should be higher.” According to a report released by the Labor Department on Wednesday, job openings in the United States reached a new high of 9.21 million in May, suggesting increased demand for labor as the economy reopens and firms fight to keep up with growing sales of their goods and services. In a daily note, Peter Boockvar, chief investment officer at Bleakley Advisory Group, stated, “Hiring is still a problem as they decreased by 85,000 in May and after a sharp surge in the two prior months of 609,000, the number of quitters declined by 388,000.” “In the end, we’ll see how these figures come together in the coming months as kids return to school, enhanced unemployment benefits expire, and the vaccine continues to be pushed out, although at a much slower pace,” he said. For three months in a row, the data on job availability has hit a new high, and it may be beginning to weaken investors’ faith in a strong economic recovery from the COVID-19 pandemic. Longer-dated bond yields have recently fallen as a result of these fears, at least in part. Treasury yields fell to their lowest level since February on Wednesday, with the 10-year Treasury note TMUBMUSD10Y, 1.310 percent falling to a rate below 1.3 percent. This encouraged buyers in yield-sensitive segments of the stock market, such as companies in the technology-heavy Nasdaq Composite and growth stocks. Markets, on the other hand, may be concerned that buying government bonds indicates that some investors have reservations about the stock market’s capacity to provide future record gains. As investors weigh the risk of lower bond yields affecting the financial sector’s profitability, bank stocks were divided, with Goldman Sachs GS, -0.62 percent stock falling and JPMorgan Chase JPM, -0.01 percent stock rising somewhat. Separately, crude-oil futures CL.1, -1.76 percent fell sharply after the Organization of the Petroleum Exporting Countries and its Allies — known as OPEC+ — disagreed on expanding output. On Tuesday, WTI crude briefly reached a six-year high before falling. What the OPEC standoff means for oil prices and financial markets may be found here. As Beijing tightens its grip over the country’s major tech enterprises, investors have become skeptical of Chinese technology companies listed on US exchanges. Didi Global Inc. DIDI, -5.24 percent was down 6.5 percent on Wednesday, after plunging 19.6 percent on Tuesday following its New York IPO last week. Which businesses are being scrutinized?
Planet Labs Inc. is expected to go public through a merger agreement with dMY Technology Group Inc. IV DMYQ.UT, +2.13 percent, a special-purpose acquisition company, in a deal valued at around $2.8 billion.
Coinbase Global Inc. (COIN) saw its stock rise 0.2 percent on Wednesday after Oppenheimer analyst Owen Lau said he was a touch more bullish on the cryptocurrency trading platform, citing prospects for excellent second-quarter results.
Chobani stated on Wednesday that it had filed a confidential draft registration statement with the Securities and Exchange Commission for a possible initial public offering.
Moderna Inc. (MRNA) saw its stock drop 5.1 percent on Wednesday after the firm said that patients in a Phase 1/2 clinical trial assessing an untested seasonal flu vaccine had begun receiving treatment.
Biohaven Pharmaceutical Holding Co. Ltd. (BHVN) saw its stock rise 12% on Wednesday after the firm announced that sales of its breakthrough migraine therapy reached $93 million in the second quarter of 2021.
What are the trends in other assets?
The ICE U.S. Dollar Index DXY, which compares the currency to a basket of six major rivals, increased by 0.2 percent.
On the New York Mercantile Exchange, the US oil benchmark CL00 fell 2.3 percent to $71.64 a barrel. Gold futures GC00 increased 0.6 percent to $1,805 an ounce.
European stocks rose, with the FTSE 100 UKX in London up 0.4 percent and the Stoxx Europe 600 index SXXP up 0.7 percent.
The Shanghai Composite SHCOMP jumped 0.7 percent in Asia, while Hong Kong’s Hang Seng Index HSI declined 0.4 percent and Japan’s Nikkei 225 NIK dropped 1%.
William Watts contributed to the story./n
