Stocks moved mostly lower in early trading on Wednesday but have regained ground over the course of the session. The major averages have bounced well off their lows of the session, with the Dow and the S&P 500 climbing back near the unchanged line.
Currently, the major averages are posting modest losses. The Dow is down 50.62 points or 0.1 percent at 38,921.79, the Nasdaq is down 56.80 points or 0.4 percent at 15,978.50 and the S&P 500 is down 3.58 points or 0.1 percent at 5,074.60.
The early weakness on Wall Street came as some traders looked to cash in on the recent strength in the markets ahead of the release of closely watched readings on consumer price inflation on Thursday.
The inflation readings, which are said to be preferred by the Federal Reserve, are expected to show the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December.
The annual rate of growth by core consumer prices, which exclude food and energy prices, is also expected to dip to 2.8 percent in January from 2.9 percent in December.
With Fed officials saying they need greater confidence inflation is slowing before they consider cutting interest rates, the data could have a significant impact on the outlook for rates.
Selling pressure waned shortly after the start of trading, however, with the subsequent potentially reflecting a positive reaction to revised data showing the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2023.
The Commerce Department said the jump by real gross domestic product in the fourth quarter was downwardly revised to 3.2 percent from the previously reported 3.3 percent. Economists had expected the surge in GDP to be unrevised.
“It is only in the topsy-turvy world of Wall Street where bad news can be good news (e.g. lower economic growth is good) because of the interplay between the economy, markets and the Federal Reserve,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.
He added, “In a market environment where people are worried about a Fed keeping rates higher for longer, any drop in economic activity (or inflation) can be seen as another reason why the Fed can cut rates sooner.”
Sector News
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Semiconductor, steel and gold stocks are seeing some weakness, while commercial real estate stocks have moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index tumbled by 1.9 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is just below the unchanged line and the U.K.’s FTSE 100 Index is down by 0.6 percent.
In the bond market, treasuries have moved back to the upside after ending the previous session modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 4.291 percent.
U.S. Stocks Regain Ground After Initial Weakness But Remain Modestly Lower
2024-02-28 16:21:50
