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Wall Street ended sharply higher on Monday, led by tech stocks. Investors are anticipating that the Federal Reserve would most likely announce a rate-hike pause from its June FOMC meeting. Also, they remain hopeful that consumer-side inflation will have subsided. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 189.55 points to close at 34,066.33. Twenty components of the 30-stock index ended in positive territory, while 10 ended in negative.
The S&P 500 gained 0.9%, or 40.07 points, to close at 4,338.93. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) rose 2.2%, 1.7% and 1.2%, respectively, while the Energy Select Sector SPDR (XLE) fell 1%.
The tech-heavy Nasdaq advanced 202.78 points, or 1.5%, to finish at 13,461.92.
The fear-gauge CBOE Volatility Index (VIX) was up 8.5% at 15.01. A total of 10.2 billion shares were traded on Monday, lower than the last 20-session average of 10.6 billion. Advancers outnumbered decliners on the S&P 500 by a 2-to-1 ratio. The S&P 500 recorded 24 new highs and three new lows, while the Nasdaq posted 107 new highs and 68 new lows.
Fed Widely Expected to Announce a Rate-Hike Pause
After weeks of delving into the topic, the Fed is expected to finally announce a rate-hike pause from its June FOMC meeting, slated for later this week. Earlier, there was talk about whether the central bank would put an end to its aggressive tax-hike regime in May itself, but that had not materialized. Interest rates have been hiked 10 times since this latest policy-tightening cycle started in March 2022.
The Consumer Price Index (CPI) data due Tuesday could help reinforce the general notion that inflation is subsiding, and might force the Fed’s hands too. There is general consensus that headline CPI would be seen to have dropped significantly in May. With recession fears rising and inflation expectedly on a downward slope, it is now widely anticipated that the Fed would revisit its tight monetary policy. Although this respite is being anticipated from the June meeting, analysts expect another rate hike in July before a definitive pause for the rest of the year.
According to the CME Group’s FedWatch tool, investors are pricing in a 76% chance that there will be no hike in June, and the rate will be held in the 5%-5.25% range. However, there is a 71% chance that rates would go up again in July.
Over the past few months, while the markets have navigated the regional banking crisis and the debt-ceiling negotiations, all eyes have been set on how the central bank interprets the goings on and the slew of data coming in, and whether they are able to manage a soft landing for the economy when the tight interest rate regime eventually comes to an end. In the current scenario, with a plausible end in sight, mega-cap growth stocks and discretionary stocks are making the most of the market’s upside.
Software giant Oracle Corporation (ORCL - Free Report) led the gains for the tech sector ahead of its quarterly earnings reportage. Stocks of the company went up as high as 7% during the session before settling down at a 6% gain for the day, after its price targets were revised up.
Shares of KeyCorp (KEY - Free Report) tumbled as much as 4.3% yesterday, taking other regional bank stocks like Comerica (CMA - Free Report) and Truist Financial (TFC - Free Report) with it. Both CMA and TFC closed more than 2% lower. (Read More)
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Stock Market News for Jun 13, 2023
Wall Street ended sharply higher on Monday, led by tech stocks. Investors are anticipating that the Federal Reserve would most likely announce a rate-hike pause from its June FOMC meeting. Also, they remain hopeful that consumer-side inflation will have subsided. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 189.55 points to close at 34,066.33. Twenty components of the 30-stock index ended in positive territory, while 10 ended in negative.
The S&P 500 gained 0.9%, or 40.07 points, to close at 4,338.93. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) rose 2.2%, 1.7% and 1.2%, respectively, while the Energy Select Sector SPDR (XLE) fell 1%.
The tech-heavy Nasdaq advanced 202.78 points, or 1.5%, to finish at 13,461.92.
The fear-gauge CBOE Volatility Index (VIX) was up 8.5% at 15.01. A total of 10.2 billion shares were traded on Monday, lower than the last 20-session average of 10.6 billion. Advancers outnumbered decliners on the S&P 500 by a 2-to-1 ratio. The S&P 500 recorded 24 new highs and three new lows, while the Nasdaq posted 107 new highs and 68 new lows.
Fed Widely Expected to Announce a Rate-Hike Pause
After weeks of delving into the topic, the Fed is expected to finally announce a rate-hike pause from its June FOMC meeting, slated for later this week. Earlier, there was talk about whether the central bank would put an end to its aggressive tax-hike regime in May itself, but that had not materialized. Interest rates have been hiked 10 times since this latest policy-tightening cycle started in March 2022.
The Consumer Price Index (CPI) data due Tuesday could help reinforce the general notion that inflation is subsiding, and might force the Fed’s hands too. There is general consensus that headline CPI would be seen to have dropped significantly in May. With recession fears rising and inflation expectedly on a downward slope, it is now widely anticipated that the Fed would revisit its tight monetary policy. Although this respite is being anticipated from the June meeting, analysts expect another rate hike in July before a definitive pause for the rest of the year.
According to the CME Group’s FedWatch tool, investors are pricing in a 76% chance that there will be no hike in June, and the rate will be held in the 5%-5.25% range. However, there is a 71% chance that rates would go up again in July.
Over the past few months, while the markets have navigated the regional banking crisis and the debt-ceiling negotiations, all eyes have been set on how the central bank interprets the goings on and the slew of data coming in, and whether they are able to manage a soft landing for the economy when the tight interest rate regime eventually comes to an end. In the current scenario, with a plausible end in sight, mega-cap growth stocks and discretionary stocks are making the most of the market’s upside.
Consequently, shares of Amazon.com, Inc. (AMZN - Free Report) and The Walt Disney Company (DIS - Free Report) rose 2.5% and 1.3%, respectively. Each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Oracle Leads Tech Gains
Software giant Oracle Corporation (ORCL - Free Report) led the gains for the tech sector ahead of its quarterly earnings reportage. Stocks of the company went up as high as 7% during the session before settling down at a 6% gain for the day, after its price targets were revised up.
No economic data was released on Monday.
Stocks That Have Made Headline
KeyCorp Slips 4.3% on Disappointing Q2 NII Guidance
Shares of KeyCorp (KEY - Free Report) tumbled as much as 4.3% yesterday, taking other regional bank stocks like Comerica (CMA - Free Report) and Truist Financial (TFC - Free Report) with it. Both CMA and TFC closed more than 2% lower. (Read More)