Major Averages Turning In Mixed Performance As Fed Decision Looms

After moving notably higher over the past several sessions, the major U.S. stock indexes are turning in a mixed performance during trading on Wednesday.

While the Nasdaq and the S&P 500 have once reached their best intraday levels in over a year, the narrower Dow is giving back ground after ending Tuesday’s trading at a four-month closing high.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is up 29.30 points or 0.2 percent at 13,602.62 and the S&P 500 is up 10.56 points or 0.2 percent at 4,379.57, but the Dow is down 115.84 points or 0.3 percent at 34,096.28.

The mixed performance on Wall Street comes as traders look ahead to the Federal Reserve’s highly anticipated monetary policy announcement this afternoon.

While the Fed is widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement for clues about the outlook for rates.

CME Group’s FedWatch Tool is currently indicating a 97.7 percent chance the Fed will leave rates unchanged today but a 59.1 percent chance of another quarter point rate hike in July.

Potentially generating some optimism about the outlook for rates, the Labor Department released a report showing producer prices in the U.S. decreased by more than expected in the month of May.

The Labor Department said its producer price index for final demand fell by 0.3 percent in May after inching up by 0.2 percent in April. Economists had expected producer prices to edge down by 0.1 percent.

The report also showed the annual rate of producer price growth slowed to 1.1 percent in May from 2.3 percent in April. The rate of growth was expected to decelerate to 1.5 percent.

A separate report released by the Labor Department on Tuesday showed the annual rate of consumer price growth slowed to a two-year low in May.

Meanwhile, a steep drop by shares of UnitedHealth (UNH) is weighing on the Dow, with the managed healthcare and insurance company plunging by 7.3 percent.

UnitedHealth is under pressure after saying seniors are undergoing surgeries delayed during the pandemic, leading to higher costs.

Sector News

While most of the major sectors are showing only modest moves on the day, airline stocks are extending a recent upward trend.

Reflecting the strength in the sector, the NYSE Arca Airline Index has jumped by 2.0 percent to its best intraday level in a year.

Steel stocks are also turning in a strong performance, driving the NYSE Arca Steel Index up by 1.5 percent to a nearly two-month intraday high.

Utilities, gold and brokerage stocks have also moved to the upside, while weakness is visible among healthcare and computer hardware stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.5 percent, while Hong Kong’s Hang Seng Index slid by 0.6 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index and the German DAX Index are both up by 0.5 percent.

In the bond market, treasuries are regaining ground after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.9 basis points at 3.790 percent.

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