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Wall Street had a mixed Monday as investors remained apprehensive about the Fed’s July meeting slated to start on Tuesday, in which a 75 basis point interest hike is expected. Market participants remained skeptical that continued rate hikes coupled with lowering of projections by companies ahead of their earnings reports can be signals of an impending recession. Two of the three major indexes ended in green, while one ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.3% or 90.75 points to close at 31,990.04. Notably, 17 components of the 30-stock index ended in green, two remained unchanged, while 11 ended in red.
The tech-focused Nasdaq Composite finished at 11,782.67, sliding 0.4% or 51.45 points due to the weak performance by large-cap technology stocks.
The S&P 500 rose 0.1% or 5.21 points to end at 3,966.84. Eight out of the 11 broad sectors of the benchmark index closed in the positive zone, while three ended in red.
The Energy Select Sector SPDR (XLE), the Utilities Select Sector SPDR (XLU) and the Financials Select Sector SPDR (XLF) advanced 3.7%, 1.3% and 0.6%, respectively, while the Consumer Discretionary Selected Sector SPDR (XLY) retracted 0.9%.
The fear-gauge CBOE Volatility Index (VIX) was up 1.4% to 23.36. A total of 9.34 billion shares were traded on Monday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 1.55-to-1 ratio. On the Nasdaq, a 1.05-to-1 ratio favored declining issues.
Investors Keep a Cautious Watch On Fed’s July Meet
Fed officials might be ending the pandemic-era support to the U.S. economy and are beginning to test whether growth can be sustained without their hand-holding. They are expected to raise interest rates by 75 basis points to a target range of 2.25% to 2.50% at the end of a two-day policy meeting on Wednesday. This would make the rates match pre-pandemic highs and raise them to a level that the officials see as roughly neutral, no longer supporting the economy over the long run. If they do end up raising rates on expected lines, it will mark one of the fastest back-to-bases from a low point to neutral, as rates were last in the 2.25%-2.50% range in late 2018 after a string of rate hikes. However, back then, signs of a slowing economy meant that the Fed refrained from any further tightening and would bring the rates down in roughly eight months.
Investors will be keeping a close watch on the proceedings and minutes of the meeting as well as on the outlook of the officials, as the 75 basis point hike is almost a given. But whether they intend to raise interests going further forward, or whether they see this as a tipping point in rate hikes would give the concerned investors a clearer picture about the health of the economy.
Big Earnings Week Ahead for Tech Stocks
Tech giants like Apple Inc. (AAPL - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Microsoft Corporation (MSFT - Free Report) are lined up to release their quarterly earnings this week. Tech stocks have recently taken a hit after the Snap Inc. (SNAP - Free Report) earnings and outlook debacle signaled that the ad-spend in the digital space was on a decline. Thus, investors will be eagerly waiting to see what the other behemoths are projecting to get a better idea about what to expect.
Rising Oil Prices Bolster Energy Sector
Oil prices rose over 1% on Monday on supply fears and a slight dip in the U.S. dollar. Brent crude futures for September settled 1.9% higher at $105.15/barrel, while WTI crude futures ended the day at $96.70, reflecting a gain of 2.1%. Russia’s Gazprom said that flows through Nord Stream 1, Russia’s single biggest gas link to Germany, would fall to 20% of capacity from Wednesday. This could lead to additional switching to crude from gas and push up oil prices.
Image: Bigstock
Stock Market News for Jul 26, 2022
Wall Street had a mixed Monday as investors remained apprehensive about the Fed’s July meeting slated to start on Tuesday, in which a 75 basis point interest hike is expected. Market participants remained skeptical that continued rate hikes coupled with lowering of projections by companies ahead of their earnings reports can be signals of an impending recession. Two of the three major indexes ended in green, while one ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.3% or 90.75 points to close at 31,990.04. Notably, 17 components of the 30-stock index ended in green, two remained unchanged, while 11 ended in red.
The tech-focused Nasdaq Composite finished at 11,782.67, sliding 0.4% or 51.45 points due to the weak performance by large-cap technology stocks.
The S&P 500 rose 0.1% or 5.21 points to end at 3,966.84. Eight out of the 11 broad sectors of the benchmark index closed in the positive zone, while three ended in red.
The Energy Select Sector SPDR (XLE), the Utilities Select Sector SPDR (XLU) and the Financials Select Sector SPDR (XLF) advanced 3.7%, 1.3% and 0.6%, respectively, while the Consumer Discretionary Selected Sector SPDR (XLY) retracted 0.9%.
The fear-gauge CBOE Volatility Index (VIX) was up 1.4% to 23.36. A total of 9.34 billion shares were traded on Monday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 1.55-to-1 ratio. On the Nasdaq, a 1.05-to-1 ratio favored declining issues.
Investors Keep a Cautious Watch On Fed’s July Meet
Fed officials might be ending the pandemic-era support to the U.S. economy and are beginning to test whether growth can be sustained without their hand-holding. They are expected to raise interest rates by 75 basis points to a target range of 2.25% to 2.50% at the end of a two-day policy meeting on Wednesday. This would make the rates match pre-pandemic highs and raise them to a level that the officials see as roughly neutral, no longer supporting the economy over the long run. If they do end up raising rates on expected lines, it will mark one of the fastest back-to-bases from a low point to neutral, as rates were last in the 2.25%-2.50% range in late 2018 after a string of rate hikes. However, back then, signs of a slowing economy meant that the Fed refrained from any further tightening and would bring the rates down in roughly eight months.
Investors will be keeping a close watch on the proceedings and minutes of the meeting as well as on the outlook of the officials, as the 75 basis point hike is almost a given. But whether they intend to raise interests going further forward, or whether they see this as a tipping point in rate hikes would give the concerned investors a clearer picture about the health of the economy.
Big Earnings Week Ahead for Tech Stocks
Tech giants like Apple Inc. (AAPL - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Microsoft Corporation (MSFT - Free Report) are lined up to release their quarterly earnings this week. Tech stocks have recently taken a hit after the Snap Inc. (SNAP - Free Report) earnings and outlook debacle signaled that the ad-spend in the digital space was on a decline. Thus, investors will be eagerly waiting to see what the other behemoths are projecting to get a better idea about what to expect.
Rising Oil Prices Bolster Energy Sector
Oil prices rose over 1% on Monday on supply fears and a slight dip in the U.S. dollar. Brent crude futures for September settled 1.9% higher at $105.15/barrel, while WTI crude futures ended the day at $96.70, reflecting a gain of 2.1%. Russia’s Gazprom said that flows through Nord Stream 1, Russia’s single biggest gas link to Germany, would fall to 20% of capacity from Wednesday. This could lead to additional switching to crude from gas and push up oil prices.
Consequently, shares of Marathon Oil Corporation (MRO - Free Report) and Occidental Petroleum Corporation (OXY - Free Report) rose 6.6% and 5.5%, respectively. Both Marathan Oil and Occidental carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
No economic data was released on Monday.