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Wall Street closed lower on Tuesday, pulled down by tech stocks. Investor mood was grim on the release of minutes from the last Fed policy meeting, which showed that Fed officials have yet not ruled out further interest rate hikes. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2%, or 62.75 points, to close at 35,088.29. Nineteen components of the 30-stock index ended in negative territory, while 11 ended in positive.
The tech-heavy Nasdaq Composite dropped 0.6%, or 84.55 points, to close at 14,199.88.
The S&P 500 lost 9.19 points, or 0.2%, to close at 4,538.19. Seven out of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE) and the Communication Services Select Sector SPDR (XLC) declined 0.8%, 0.5% and 0.3%, respectively, while the Health Care Select Sector SPDR (XLV) advanced 0.6%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 13.35. A total of 9.4 billion shares were traded on Tuesday, lower than the last 20-session average of 10.9 billion. Decliners outnumbered advancers on the NYSE by a 1.76-to-1 ratio. On the Nasdaq, declining issues led advancing ones by 2.29-to-1.
Fed Minutes Weigh on the Market
This week, the investors were keeping an eye out for the minutes from the Fed’s Oct 31 to Nov 1 policy meeting. Market participants were hoping to gain some insight into the central bank’s rate decision in their attempt to gauge what might lead the bank to change course going forward.
Market participants, over the past few weeks, had been ignoring the hawkish comments made by Fed officials about future rate hikes and bet on indications from economic data that inflation will be sufficiently low for the Fed to announce further rate hikes.
However, the released minutes showed that even as Fed officials agreed that a cautious approach was required in their monetary policymaking decisions, they were not ruling out further interest rate hikes. Interest rates would go up if the “progress in controlling inflation was not sufficient. Per the minute, “In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time”.
There was acknowledgement that the problem the economy currently faces is double-edged, with the possibility of a recession existing amid still-high inflation. However, rate-hikes not getting ruled out still acted as a dampener in the markets. Mega-cap growth stocks, like tech, suffered the most.
Per a report from the National Association of Realtors, existing home sales for October decreased to 3.79 million units. For September, the number remained unrevised at 3.96 million units.
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Stock Market News for Nov 22, 2023
Wall Street closed lower on Tuesday, pulled down by tech stocks. Investor mood was grim on the release of minutes from the last Fed policy meeting, which showed that Fed officials have yet not ruled out further interest rate hikes. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2%, or 62.75 points, to close at 35,088.29. Nineteen components of the 30-stock index ended in negative territory, while 11 ended in positive.
The tech-heavy Nasdaq Composite dropped 0.6%, or 84.55 points, to close at 14,199.88.
The S&P 500 lost 9.19 points, or 0.2%, to close at 4,538.19. Seven out of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE) and the Communication Services Select Sector SPDR (XLC) declined 0.8%, 0.5% and 0.3%, respectively, while the Health Care Select Sector SPDR (XLV) advanced 0.6%.
The fear-gauge CBOE Volatility Index (VIX) decreased 0.5% to 13.35. A total of 9.4 billion shares were traded on Tuesday, lower than the last 20-session average of 10.9 billion. Decliners outnumbered advancers on the NYSE by a 1.76-to-1 ratio. On the Nasdaq, declining issues led advancing ones by 2.29-to-1.
Fed Minutes Weigh on the Market
This week, the investors were keeping an eye out for the minutes from the Fed’s Oct 31 to Nov 1 policy meeting. Market participants were hoping to gain some insight into the central bank’s rate decision in their attempt to gauge what might lead the bank to change course going forward.
Market participants, over the past few weeks, had been ignoring the hawkish comments made by Fed officials about future rate hikes and bet on indications from economic data that inflation will be sufficiently low for the Fed to announce further rate hikes.
However, the released minutes showed that even as Fed officials agreed that a cautious approach was required in their monetary policymaking decisions, they were not ruling out further interest rate hikes. Interest rates would go up if the “progress in controlling inflation was not sufficient. Per the minute, “In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time”.
There was acknowledgement that the problem the economy currently faces is double-edged, with the possibility of a recession existing amid still-high inflation. However, rate-hikes not getting ruled out still acted as a dampener in the markets. Mega-cap growth stocks, like tech, suffered the most.
Consequently, shares of Amazon.com, Inc. (AMZN - Free Report) and Microsoft Corporation (MSFT - Free Report) slid 1.5% and 1.2%, respectively. Amazon carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Per a report from the National Association of Realtors, existing home sales for October decreased to 3.79 million units. For September, the number remained unrevised at 3.96 million units.