Nasdaq Dips Into The Red After Early Upward Move But Dow, S&P 500 Remain Positive

After an early move to the upside, the major U.S. stock indexes have turned mixed over the course of morning trading on Wednesday. While the tech-heavy Nasdaq has pulled back modestly below the unchanged line, the Dow and the S&P 500 remain in positive territory.

Currently, the Nasdaq is posting a slim loss, down just 4.04 points or less than a tenth of a percent at 13,674.15. Meanwhile, the Dow is up 158.31 points or 0.5 percent at 34,676.04 and the S&P 500 is up 10.18 points or 0.2 percent at 4,454.13.

The mixed performance on Wall Street comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon, with the central bank widely expected to leave interest rates.

Traders are likely to pay close attention to the accompanying statement and the central bank’s projections for clues about the outlook for rates.

“The median dot plot projection currently calls for one additional 25 basis point rate hike through the end of 2023 followed by four 25 basis point cuts in 2024, and any changes to these projections have the potential to cause uncertainty and potential volatility for markets,” said Sam Millette, Fixed Income Strategist for Commonwealth Financial Network.

He added, “With that being said, the most likely result for this meeting is no immediate change in the current path of monetary policy, with the potential for a hints of a future rate hike during Jerome Powell’s post-meeting press conference.”

With the announcement just hours away, CME Group’s FedWatch Tool is currently indicating a 99.0 percent chance the Fed will leave rates unchanged.

Meanwhile, the likelihood of another rate hike in November has seemingly decreased in recent days. The FedWatch Tool currently indicates just a 28.9 percent chance of a quarter point rate increase.

Treasury yields are giving back ground ahead of the Fed announcement, with the yield on the benchmark ten-year note pulling back off its highest levels since 2007.

Early buying interest was also generated in reaction to a pullback by the price crude oil, as the recent surge in oil prices has led to renewed concerns about inflation.

Crude for October delivery is slipping $0.28 to $90.92 a barrel, pulling back further off the highest levels in 10 months following a downturn on Tuesday.

Sector News

Gold stocks are showing a substantial move back to the upside following a pullback on Tuesday, resulting in a 2.1 percent surge by the NYSE Arca Gold Bugs Index.

The rebound by gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery climbing $10.20 to $1,963.90 an ounce.

Significant strength is also visible among airline stocks, as reflected by the 1.8 percent gain being posted by the NYSE Arca Airline Index. The index is bouncing off its lowest closing level in almost five months.

Tobacco, computer hardware and commercial real estate stocks are also seeing notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index has advanced by 0.9 percent, the German DAX Index and the French CAC 40 Index are both up by 0.7 percent.

In the bond market, treasuries are regaining ground after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.6 basis points at 4.329 percent.