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Market Wrap: Stocks, Bonds, Commodities |
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On Wednesday, the S&P 500 fell 33 points (-0.45%) to 7,551, and the Dow Jones dropped 631 points (-1.21%) to 51,461, while the Nasdaq 100 edged up 7 points (+0.02%) to 28,945, as equities faded into the close after the Federal Reserve delivered a widely expected 25-basis-point interest-rate hike.
Fed policymakers voted unanimously to lift the federal funds target rate to a range of 3.75%-4.00%, the first rate hike since 2023. They also penciled in at least one more hike this year.
The U.S. 10-year Treasury yield climbed a further 1.4 basis points to 5.020%. Meanwhile, traders are seeing a 40% probability of another 25-basis-point hike in October, according to the CME FedWatch Tool.
Mega-caps split after the Fed’s rate decision: Nvidia (NVDA) closed 0.82% higher and Meta Platforms (META) gained 0.46%, while Microsoft (MSFT) fell 1.37% and Amazon (AMZN) was down 0.99%.
Most of the Dow Jones constituents closed lower, with International Business Machines (IBM) losing 4.38%, Boeing (BA) down 3.69%, and Verizon Communications (VZ) down 3.28%.
Energy stocks retreated alongside oil prices, with ConocoPhillips (COP) losing 6.15%, APA Corp (APA) down 5.53%, and ExxonMobil (XOM) down 3.54%.
Financial stocks also underperformed the market, with Goldman Sachs (GS) falling 3.96%, American Express (AXP) down 3.70%, and Wells Fargo (WFC) down 2.98%.
Bitcoin and crypto-related stocks remained under pressure after the Clarity Act crypto regulatory bill was blocked by the U.S. Senate, with Coinbase (COIN) dropping 4.42%, Strategy (MSTR) down 2.64%, and Robinhood Markets (HOOD) down 5.46%.
Meanwhile, semiconductor stocks showed resilience, with Intel (INTC) rising 4.03%, Marvell Technology (MRVL) up 3.61%, and Advanced Micro Devices (AMD) up 1.65%.
European stocks closed higher, with the DAX 40 adding 0.53%, the CAC 40 up 0.62%, and the FTSE 100 up 0.28%.
U.S. WTI crude futures retreated 3.40 dollars (-3.21%) to 102.43 dollars a barrel.
Spot gold remained in a downtrend, declining 29 dollars to 4,264 dollars an ounce.
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The U.S. dollar was boosted by the Fed’s rate hike and the projection of at least one more increase by year-end.
At the same time, U.S. data showed that retail sales grew 1.2% month-on-month in August (vs +0.8% expected, -0.5% in July).
USD/JPY jumped 116 pips to 156.26. On Friday, the Bank of Japan will decide on interest rates, with a 25-basis-point hike widely expected.
EUR/USD fell 79 pips to 1.1465, GBP/USD dropped 97 pips to 1.3381, and AUD/USD was down 44 pips to 0.7088.
Later today, the Bank of England is expected to keep its key interest rate unchanged.
USD/CHF rose 71 pips to 0.8258, and USD/CAD was up 68 pips to 1.3988.
Bitcoin was steady, trading around 76,000 dollars.
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In Asian trading hours, EUR/USD and GBP/USD both remained subdued, at 1.1461 and 1.3376 respectively.
Meanwhile, USD/JPY eased to 156.12.
Gold rebounded to 4,290 dollars.
Bitcoin was little changed at 76,113 dollars.
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The Bank of England is expected to keep its benchmark rate unchanged at 3.75%.
In the U.S., housing starts are estimated to increase by 9.0% month-on-month in August, while building permits are expected to drop 1.6%. Also, weekly initial jobless claims are estimated at 208,000.
Canada's producer price index is expected to be up 12.3% year-on-year in August.
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