4:05pm: US equities tank on negative Fed news
US stocks closed lower sharply as the Federal Reserve signaled an end to its easy-money policies.
As Treasury yields jumped, investors were frightened by minutes of the Fed’s most recent meeting, which showed the Central Bank discussing a reduction in its balance sheet shortly after it raises rates later this year.
On the day, the DJIA fell by 392 points, or 1.07%, to 36,407 and the S&P 500 dropped 1.94% to 4,700.
And the tech-heavy Nasdaq got hammered -- declining 522 points, or 3.34%, to 15,813.
12:15pm: Nasdaq continues to drop, but earning season may change that
The US market continued a downward trend with mixed stock indexes midday on Wednesday. While the Dow Jones Industrial Average made a recovery at noon, the tech-heavy Nasdaq Composite and S&P 500 continued to drop after a record-high opening on the first trading day of the new year earlier this week.
At noon, the Dow Jones Industrial Average gained 0.17% or 68 points at 36,867. The broader S&P 500 fell 0.22% while Nasdaq Composite plunged by 0.92%.
“For now the Nasdaq 100 remains firmly out of favour, but with earnings season in the US barrelling towards us that might change once investors are reminded of the remarkable cash generation powers of the FANG stocks,” said Chris Beauchamp, chief market analyst at IG, a global leader in online trading.
The analyst also said that the continued outperformance of sectors such as mining, banks, and oil points towards a resurgence of the ‘rebound trade’ for those stocks “poised to benefit from an improving global economy and the expected rise in yields and interest rates around the globe, a theme supported by today’s solid ADP report, which itself has prepared investors for a decent NFP number on Friday.”
11am: Proactive North America headlines:
Ultra Resources gets set to drill its Laguna Verde lithium brine project in Argentina; selects drilling contractor
LQwD Fintech CEO says Bitcoin Lightning Network-focused company expects further growth in 2022
Valeo Pharma says its Hesperco immune support product is now available at select Loblaws stores across Canada
Esports Entertainment Group renews partnership with Take-Two’s NBA 2K League
Stifel GMP upbeat on turnaround prospects for Red Lake - focused Pure Gold Mining
CytoDyn announces positive results from part two of Phase 2 Nonalcoholic steatohepatitis clinical trial
MGX Minerals strikes distribution partnership with Dong Bang Metal Co of Korea for metallurgical grade silicon
Plurilock Security CEO Paterson says identity-centric cybersecurity solutions provider ‘positioned’ for further growth in 2022
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Adcore announces new contracts for aggregated estimated annual ad-budget of C$4.9M
BTU Metals kicks off new drilling program at its Red Lake properties that border the Dixie project owned by Great Bear Resources (TSX-V:GBR)
Clean Air Metals reports impressive assay results from high grade Thunder Bay North project in Ontario
Mindset Pharma partners with McQuade Center for Strategic Research and Development to develop psychedelic medicine
Magna Mining announces positive assay results from 2021 drilling program at Shakespeare mine
Ayurcann Holdings entering Ontario with its bestselling “Fuego” vapes
KetamineOne Capital Limited (LSE:CAPD) appoints two new members to its Medical Advisory Board
Cloud DX (TSX-V:CDX, OTCQB:CDXFF) announces C$3M placing of convertible debenture units
Vicinity Motor receives US$19M order for Optimal Electric Class 4 commercial chassis
Fobi AI (TSX-V:FOBI, OTCQB:FOBIF) inks $300,000 annual license with top global insurance company to provide digital proof of insurance for Europe
Altaley Mining says Tahuehueto construction 'very near' completion; hails improved performance at Campo Morado
Bragg’s ORYX Gaming content launches with 888 in the UK
American Manganese receives additional support to advance demonstration plant project
9.47am: US shares start mixed
US stocks started mixed and mainly lower as the prospect of rising interest rates comes back onto the investor radar.
The Dow Jones Industrial Average added around 19 points at 36,819 in early deals in New York. The S&P 500 fell around seven points to stand at 4,785. The Nasdaq shed around 90 at 15,536.
Investors are becoming increasing convinced that the Federal Reserve will raise rates three times in 2022, starting in May, noted analyst Fawad Razaqzada from Thinkmarkets.com.
"This is because inflation has surged to multi-decade highs and the Fed simply cannot allow price pressures to rise further and get out of hand.
"The FOMC has already announced it will be wrapping up its bond purchases by March. Minutes of the Fed’s December meeting, when the central bank announced it would be winding down bond-buying quicker, will be closely watched later on," he added.
Before the Fed minutes release later, there will also be the closely watched private sector payroll ADP non-farm employment data, which will give more of an idea of the US economy, ahead of the official jobs report on Friday.
6.30am: US stocks seen opening mixed
US stocks are expected to open mixed as investors shift out of rate-sensitive tech stocks and into cyclicals ahead of the release of minutes from the Federal Open Market Committee’s most recent meeting, which may indicate future interest rate hikes.
Futures for the Dow Jones Industrial Average rose 0.02% in Wednesday pre-market trading, while the broader S&P 500 index declined 0.07% and those for the tech-heavy Nasdaq 100 fell 0.35%.
After a strong start to the year, stocks also ended mixed on Tuesday, with the Dow gaining 0.59% to a record close of 36,800, while the S&P 500 edged back three points, or 0.06%, to 4,794 and the Nasdaq declined 1.33%, to 15,623.
“After a sprightly start to the New Year, investor focus switched to the more pressing issue of interest rate hike expectations,” commented Richard Hunter, head of markets at interactive investor.
“Rising Treasury yields in the US prompted a bout of rotation from high growth stocks, such as technology, into value, boosting financial and industrial shares.
Minutes are due later from the latest Federal Reserve meeting in December, and will likely reveal the latest thinking on the need to curb stubbornly high inflation by tightening policy, Hunter added. As such, he said the current expectation is for an initial hike in March, which is part of the reason for rising yields.
"The rotation bore down on the Nasdaq index and left the S&P500 virtually flat, although it also propelled the Dow Jones Industrial Average to another record closing high, despite a manufacturing reading which came in slightly shy of expectations, but nonetheless confirmed continuing growth,” said Hunter.