4:05pm: Wall Street wobbles
Wall Street ended the day on a sour note, with the Dow pulling out a win but the Nasdaq dropping over 1%.
At the close, the Dow had gained 0.3% at 33,665 points, the S&P 500 retreated 0.4% at 4,268 and the Nasdaq fell 1.3% to end the day at 13,105.
The surprise rate hike from the Bank of Canada and rising oil prices "revived the spectre of tightening policy," according to IG's Chris Beachamp.
“The sight of central banks moving rates higher again comes as oil prices have perked up this afternoon. This combination has proved to be dangerous for stocks over the past eighteen months," noted Beauchamp.
12:05pm: Stocks struggle for direction as Chinese exports fall
US stocks were mixed in noon trading after a surprise drop in Chinese exports as the OECD raised new concerns about global growth.
At midday, the Dow rose 17 points to 33,590, while the S&P 500 eased 10 points at 4,274 and the tech-heavy Nasdaq lost 86 points to 13,191.
“We still have leading economic indicators down 13-months in a row,” Crossmark Global Investments chief investment officer Bob Doll said.
“We still have an inverted yield curve [and] liquidity issues,” he added.
Notable movers included shares of Affirm Holdings Inc, which jumped 15% after the payment network revealed that Amazon Pay is adding Affirm’s flexible payment option to its checkout.
9:48am: Markets build on Tuesday momentum
Shortly after the opening bell, the Dow was up 102 points, 0.3%, to 33,675, the Nasdaq Composite added 78 points, 0.6%, to 13,354 and the S&P 500 improved 14 points, 0.3%, to 4,298.
The benchmarks are moving higher even after a major Tuesday rally, headlined by the S&P 500's highest close of 2023. That's a great sign, according to Adam Sarhan, CEO of 50 Park Investments.
“The fact that it refuses to fall to me is extremely bullish,” Sarhan said. “Normally, after a big run up, you see a market pullback, and when the market doesn’t pull back and goes sideways, that to me is very bullish.”
7:50am: Marking time
US stocks are likely to open little changed on Wednesday as equities mark time ahead of the Federal Reserve’s next interest rate decision on June 14, with limited market-moving data expected in the next few days.
Futures for the Dow Jones Industrial Average (DJIA) declined marginally in pre-market trading, while those for the broader S&P 500 index rose less than 0.1%, and contracts for the Nasdaq-100 were flat.
The main US indices ended mostly higher on Tuesday, reversing early losses, with the S&P 500 continuing to flirt with bull market levels, closing 0.2% higher at 4,284 points. The Nasdaq Composite gained 0.4% to 13,276 while the DJIA finished flat at 33,573.
“Markets are generally swimming slightly against the tide this week, with the S&P 500 (+0.22%) still not quite able to break out into bull market territory that it crossed intra-day on Monday,” commented Deutsche Bank’s Jim Reid.
“Having said that, the index did just about close at a high for 2023 so the momentum is still there to some degree. In a week of limited data and a Fed blackout there have been a few stories swirling around in the background that have dampened sentiment without reversing it. That has included geopolitical risks, weak data releases, as well as growing scepticism that the Fed would end up cutting rates this year," Reid added.
Traders seem squarely positioned ahead of next week when the latest inflation data becomes available before the Federal Reserve announces its latest interest rate decision, interactive investor’s Richard Hunter noted.
“Inflation is likely to have cooled once more in May, although core prices could remain higher than the Fed would like in its ongoing battle to strangle inflation,
“The current consensus has now very much swayed to an expectation that the Fed will pause hiking next week, with the possibility of a rise in July now being an even bet. In the meantime, markets could fall into something of a holding pattern ahead of these releases which will dictate shorter-term price movements," Hunter added.
Contact the author at stephen.gunnion@proactiveinvestors.com