Nasdaq, S&P 500 Move To The Downside Ahead Of Fed Announcement

Stocks have moved mostly lower during trading on Wednesday, giving back ground following the notable rebound seen in the previous session. The Nasdaq and the S&P 500 have moved to the downside, although the narrower Dow is posting a modest gain.

Currently, the Nasdaq is down 123.84 points or 0.6 percent at 19,609.74 and the S&P 500 is down 19.19 points or 0.3 percent at 6,048.51. The Dow, on the other hand, is up 32.61 points or 0.1 percent at 44,882.96.

Concerns about the outlook for interest rates may be weighing on the markets ahead of the Federal Reserve’s monetary policy announcement this afternoon.

With the Fed widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement as well as Fed Chair Jerome Powell’s post-meeting press conference.

Recent economic data has led to worries about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 73.8 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

The weakness on Wall Street also comes as traders look ahead to the release of earnings news from big-name companies like Microsoft (MSFT), IBM (IBM), Meta Platforms (META) and Tesla (TSLA) after the close of today’s trading.

A pullback by shares of Nvidia (NVDA) has also generated some selling pressure, with the AI darling and market leader tumbling by 4.9 percent after soaring by 8.8 percent on Tuesday.

Sector News

Software stocks are giving back ground after turning in a strong performance in the previous session, with the Dow Jones U.S. Software Index falling by 1.4 percent. The index ended Tuesday’s trading at its best closing level in over a month.

Notable weakness is also visible among housing stocks, as reflected by the 1.1 percent loss being posted by the Philadelphia Housing Sector Index.

On the other hand, airline stocks have shown a strong move to the upside, driving the NYSE Arca Airline Index up by 1.3 percent.

Steel, computer hardware and banking stocks are also seeing some strength on the day, helping to limit the downside for the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, with several markets closed for holidays. Japan’s Nikkei 225 Index jumped by 1.0 percent, while Australia’s S&P/ASX 200 Index climbed by 0.6 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.3 percent, the U.K.’s FTSE 100 Index is up by 0.5 percent and the German DAX Index is up by 1.1 percent.

In the bond market, treasuries are seeing modest strength ahead of the Fed’s monetary policy announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 4.534 percent.

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