4:15pm: S&P 500 manages third-striaght winning day
The Dow closed Wednesday up 72 points, 0.2%, at 31,038, the Nasdaq Composite added 40 points, 0.4%, to 11,362 and the S&P 500 improved 14 points, 0.4%, to 3,845.
The benchmarks improved in the afternoon as investors reacted to minutes from the Federal Reserve meeting, which indicated another interest rate increase of 50 or 75 basis points "would likely be appropriate at the next meeting.”
“I think whatmarkets might be latching ontois the comment about how a more restrictive stance might be appropriate if inflation pressures persist,” said Zachary Griffiths, macro strategist at Wells Fargo, as reported by CNBC. “That’s probably more hawkish than Powell’s comments at his press conference.”
2.15pm: Aggressive rate hikes to continue
An aggressive rate hike for July is almost certain as the Fed remains committed to reining in inflation to its target of 2%, according to the minutes from the Central Bank’s June meeting released this afternoon.
Per the minutes, policymakers agreed that an interest rate rise of either 50 or 75 basis points would be appropriate at the next meeting.
The committee also remarked that a restrictive stance of policy was required for it to meet its legislative mandate to promote maximum employment and price stability and to position the Fed to implementmore restrictive policy if inflation came in higher than expected.
“Many participants judged that a significant risk now facing the committee was that elevated inflation could become entrenched if the public began to question the resolve of the committee to adjust the stance of policy as warranted,” the committee noted.
Following the release of the minutes, the markets remained relatively flat. The Dow Jones Industrial Average was down 0.3%, the S&P 500 was down 0.17%, and the Nasdaq Composite had dipped 0.24%.
12.05pm: All eyes on Fed minutes
US stocks driftedslightly into the red at noon as traders sat tight ahead of this afternoon’s release of minutes from the Fed’s June rate-setting meeting.
At midday, the Dow Jones Industrial Average had dipped 116 points at 30,851 points.
The S&P 500 was down 13 points at 3,813 points and the Nasdaq Composite was down 42 points at 11,280 points.
In terms of major movers, electric vehicle maker Rivian Automotive Inc (NASDAQ:RIVN) had jumped about 10% after the company released updated production and delivery numbers.
The company said in 2Qit produced 4,401 vehicles at its Illinois facility and delivered 4,467 vehicles – a significant jump from 1Q where the company produced 2,553 vehicles and delivered 1,227.
Shares of Enjoy Technology had also jumped a whopping 44% following the news last week that the company had filed for bankruptcy and since struck a deal to sell most of its assets to device insurance company Asurion LLC.
9.40am: Proactive North America headlines:
Tesla's delivery dip forces rethink from some analysts
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Boosh Plant-Based Brands sees jump in monthly gross sales revenue to CA$897,048 in June
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BetterLife Pharma secures additional Mitacs funding for BETR-001 preclinical depression studies
Mindset Pharma granted allowance for patent covering its short-duration novel psychedelic medications
Vanstar Mining Resources hails encouraging winter drill results from IAMGOLD at Nelligan JV project in Québec
Nextech AR Solutions Corp launches ARitize 3D model-making software for WooCommerce businesses
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Tocvan Ventures identifies new target area at Murcielago at El Picacho project, Mexico
CULT Food Science says affiliate Jellatech marks major milestone with first animal-free collagen product
Tiidal Gaming Group says its Sportsflare division enters licensing agreement with Bayes Esports Solutions
Power Nickel is developing its NISK project in Quebec into one of the greenest sources of class-1 nickel in history
O3 Mining provides update on well-funded 40,000 metre drilling program on its Marban Project in Val-d'Or, Quebec
Doubleview Gold closes the second tranche of its non-brokered private placement for gross proceeds of $2M
9.35am: Little action ahead of Fed minutes release
US stocks opened flat on Wednesday as investors held off from making any major moves ahead of the minutes from the Fed’s latest rate-setting meeting being releasedthis afternoon.
At the open, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite were steady at 30,977 points, 3,833 points, and 11,328 points respectively.
Analysts at ING predicted that the Fed minutes would sound hawkish and were set to increasingly fall on deaf investor ears.
“If [Fed chair] Powell’s recent remarks are anything to go by, the tone of the FOMC minutes will cause cognitive dissonance, with markets now openly questioning how far and how long the Fed can tighten policy before having to reverse course,” the analysts wrote in a report.
6:30am: Recession fears dominant
US stocks are expected to open lower on Wednesday ahead of the release later of the Federal Open Market Committeeminutes from its previous rate-setting meeting.
The Federal Reserve's thoughts about the economy and the path for interest rates will be closely scrutinized as markets brace for the prospect of recession.
Futures for the Dow Jones Industrial Average were trading 0.2% lower pre-market, while those for the broader S&P 500 index were down 0.2% and futures for the tech-laden Nasdaq-100 were off 0.3%.
“Recession fears buffeted markets overnight, with the price action across various asset classes looking like a self-sustaining negative feedback loop, triggering more stop losses as prices slumped and dragging in trend-following momentum-hunting fast money,” said Jeff Halley, senior market analyst, Asia Pacific, at OANDA.
On the data front, the Fed policy meeting minutes, due at 2.00pm ET, will be thekey driver for markets. While some investors are holding out hope that the second half of the year may prove a little better for equity markets, recession fears have even hit oil prices amid fears that demand for oil will drop off as growth falters. In the meantime, growth fears are helping lift the US dollar.
In energy markets, after recent falls, WTI crude oil futures were up 0.4% at $99.85 a barrel whileBrent crude futures were 1.0% higher at $103.77.
“The barrel of US crude took a decent dive yesterday, and broke the $100 psychological support as the recession fears weighed on demand prospects, and shifted the market attention from too little supply, to potentially too little demand,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Oil is slightly up this morning, near the $100 resistance, but the market rhetoric shifts from buying the dips to selling the tops,” she said.
Elsewhere,officials in Shanghai are mass testing for coronavirus (COVID-19) againfollowing a surge in cases in the past two days, signaling that economic activity in China may slow down again, Ozkardeskaya noted.
Contact the author at jon.hopkins@proactiveinvestors.com
