Stocks have shown a lack of direction over the course of the trading session on Wednesday, with the major averages bouncing back and forth across the unchanged line. Despite the choppy trading, the Nasdaq and the S&P 500 reached new record intraday highs in early trading.
Currently, the major averages are posting modest gains. The Dow is up 60.89 points or 0.2 percent at 34,638.26, the Nasdaq is up 13.45 points or 0.1 percent at 14,677.09 and the S&P 500 is up 11.05 points or 0.3 percent at 4,354.59.
The lackluster performance on Wall Street comes as traders seem reluctant to make significant moves ahead of this afternoon’s release of the minutes of the Federal Reserve’s latest monetary policy meeting.
The minutes of the Fed’s mid-June meeting may shed additional light on the outlook for the central bank’s asset purchase program.
Economic projections provided following the conclusion of the two-day meeting pointed to an increase in interest rates in 2023.
The latest projections from Fed officials suggest interest rates will be increased to 0.6 percent in 2023 compared to previous projections indicating rates would remain at near-zero levels. Seven officials expect a rate hike as soon as 2022.
Meanwhile, the Fed said it plans to continue its bond purchases at a rate of at least $120 billion per month until “substantial further progress” has been made toward its goals of maximum employment and price stability.
In his post-meeting press conference, Fed Chair Jerome Powell said reaching the standard of “substantial further progress” is still “a ways off” and stressed the central bank would provide “advance notice” before making any changes to its asset purchases.
Housing stocks have moved sharply higher over the course of the session, driving the Philadelphia Housing Sector Index up by 2 percent. The strength in the sector may be partly due to a continued drop in treasury yields.
Considerable strength has also emerged among steel stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Steel Index.
On the other hand, energy stocks continue to see substantial weakness, moving sharply lower along with the price of crude oil. Crude for August delivery is currently tumbling $1.79 to $71.58 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 3 percent and the NYSE Arca Oil Index is down by 2.4 percent.
Semiconductor, airline and brokerage stocks have also moved to the downside on the day, offsetting the strength in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan’s Nikkei 225 Index slumped by 1 percent, while China’s Shanghai Composite Index advanced by 0.7 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index jumped by 1.2 percent, the U.K.’s FTSE 100 Index climbed by 0.7 percent and the French CAC 40 Index rose by 0.3 percent.
In the bond market, treasuries are extending the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6 basis points at 1.310 percent.
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