In a day of contemplation, Wall Street’s main indexes concluded with modest declines on Wednesday. Investors took their time to digest the minutes from the U.S. Federal Reserve’s recent gathering, all while bracing themselves for significant economic data scheduled to emerge in the coming days.
Those minutes revealed a united Federal Reserve that reached an agreement to maintain interest rates at the June meeting. This decision was made to provide ample time for assessment, to gauge whether additional rate hikes would be necessary.
Despite the release of the long-anticipated minutes, investors still maintained their expectations that the central bank would raise rates at the upcoming meeting later this month. However, they eagerly awaited crucial economic data, including the monthly U.S. jobs report set to be unveiled on Friday.
“The markets are in a wait-and-see mode for the economic data,” shared Paul Nolte, a senior wealth advisor and market strategist at Murphy & Sylvest Wealth Management. “Since the Fed is dependent on data, so is the market.”
The Dow Jones Industrial Average experienced a dip of 129.83 points, equivalent to 0.38%, settling at 34,288.64. The S&P 500 followed with a loss of 8.77 points, or 0.20%, reaching 4,446.82, while the Nasdaq Composite dropped by 25.12 points, about 0.18%, concluding at 13,791.65.
Among the S&P 500 sectors, materials took the biggest hit, recording a decline of 2.5%.
Regarding the latest data unveiled on Wednesday, new orders for U.S.-made goods showed a less-than-expected increase in May. This revelation fueled concerns about a potential economic slowdown. Additionally, a private-sector survey disclosed that China’s services activity expanded at the slowest pace in five months during June.
Chip stocks suffered a setback as China declared its intention to impose export controls on certain metals extensively utilized in the semiconductor industry. As tensions escalate between Beijing and Washington over access to high-tech microchips, the Philadelphia SE Semiconductor Index experienced a drop of 2.2%. Notably, shares of Intel (NASDAQ:INTC) fell 3.3%, while Texas Instruments (NASDAQ:TXN) experienced a decline of 1.8%.
In contrast, shares of Meta Platforms rose by 2.9% in anticipation of the imminent launch of the company’s Twitter-rival app, Threads, scheduled for Thursday.
Megacap stocks such as Meta have been at the forefront of the market’s gains this year, leading to significant increases in major equity indexes. In fact, the Nasdaq Composite witnessed its largest first-half surge in 40 years.
“We could see the larger stocks pull back, but the average stock may catch up,” commented Jack Ablin, the chief investment officer at Cresset Capital. “We are anticipating somewhat of a convergence.”
United Parcel Service (NYSE:UPS) encountered a decline of 2.1% after the Teamsters Union claimed that UPS had “walked away” from contract negotiations. However, the shipping giant firmly denied these allegations.
On the NYSE, declining issues surpassed advancing ones with a ratio of 2.29-to-1, while on Nasdaq, decliners prevailed with a ratio of 1.84-to-1.
During this period, the S&P 500 achieved 18 new 52-week highs but only experienced one new low. As for the Nas
daq Composite, it reached 55 new highs and 65 new lows.
Throughout the day, approximately 10.3 billion shares exchanged hands on U.S. exchanges, slightly below the daily average of 11.1 billion shares over the past 20 sessions.
All in all, Wall Street ended the day with a modest loss, contemplating the insights gained from the Federal Reserve meeting. Investors eagerly awaited the upcoming economic data, navigating through market fluctuations and uncertainties.