Yahoo Finance Stock Market News for Jun 15, 2023
Wall Street ended mixed on Wednesday, driven by comments made by Fed officials. Interest rates were not hiked at the June Fed FOMC meeting, but it was indicated that they would continue to rise through the rest of the year. One of the three major indexes ended in the green, one ended in the red, while the other remained virtually unchanged.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.7% or 232.79 points to close at 33,979.33. Seventeen components of the 30-stock index ended in negative territory, while 13 ended in positive.
The S&P 500 remained virtually flat to close at 4,372.59. Seven of the 11 broad sectors of the benchmark index ended in negative territory. The Energy Select Sector SPDR (XLE), the Health Care Select Sector SPDR (XLV) and the Materials Select Sector SPDR (XLB) declined 1%, 1% and 0.4%, respectively, while the Technology Select Sector SPDR (XLK) rose 1%.
The tech-heavy Nasdaq advanced 53.16 points, or 0.4%, to finish at 13,626.48.
The fear-gauge CBOE Volatility Index (VIX) was down 5% at 13.88. A total of 12.1 billion shares were traded on Wednesday, higher than the last 20-session average of 10.7 billion. Decliners outnumbered advancers on the S&P 500 by a 1.3-to-1 ratio. The S&P 500 recorded 40 new highs and 2 new lows, while the Nasdaq posted 90 new highs and 69 new lows.
Producer Price Index Falls in May
The U.S. Bureau of Labor Statistics reported on Wednesday that Producer Price Index for final demand declined 0.3% in May, after increasing 0.2% in April. This comes against a wide consensus estimate of a 0.1% expected decline for the period and helped lift investor mood. Over the last 12 months, the index for final demand increased 1.1%. This annual increase is the smallest in the last two and a half years. The index for final demand, less food and energy, also known as core PPI, rose 0.1% in May, as it did in April.
If one couples the data with the lower-than-expected CPI numbers released in the previous session, all indications are that inflation pressures are abating throughout the economy and might eventually provide relief to consumers. This brought some early cheer to the market.
Fed Announces a Rate-Hike Pause But Warns About Future Hikes
The Federal Reserve finally announced a much-anticipated rate hike pause at the conclusion of its June FOMC meeting but signaled that borrowing costs may still need to almost half of a percentage point by the end of this year. Fed Chair Jerome Powell, in a press conference following the meeting, stated that growth and the labor market were holding up better than expected despite the aggressive monetary policy tightening over the past year or so. This entails that the economy has not slowed down to levels that the Fed believes are suitable for loosening its grip, and inflation, too, has not come down to its 2% target.
Powell suggested that “more restraint will be necessary than we thought,” although “the pieces of the inflation puzzle were beginning to fall into place.” Nine of 18 officials who attended the meeting foresee interest rate moving up another half of a percentage point beyond the current 5.00-5.25% range, the level where it was held in June. Three officials, however, feel that would not be sufficient.
Even as the June meeting snapped a string of 10 consecutive rate hikes, the continued hawkish stance from Fed officials weighed down on investors as Wall Street closed the session on a mixed note. Technology stocks continued to drive the gains, though.
Consequently, shares of Intel Corporation INTC and NVIDIA Corporation NVDA rose 4.9% and 4.8%, respectively. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Per a government report, for the week ending Jun 9, 2023, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.9 million barrels from the previous week.
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