U.S. Stocks Climb Off Worst Levels But Remain Mostly Lower

After coming under pressure in late morning trading on Wednesday, stocks have regained ground over the course of the session. The major averages have climbed well off their worst levels but currently remain in negative territory.

The Nasdaq fell to its lowest intraday level in almost a month earlier in the session and is currently down 92.69 points or 0.7 percent at 13,791.64. The S&P 500 is down 12.32 points or 0.3 percent at 4,487.06, while the Dow is down 54.25 points or 0.2 percent at 35,260.24.

The late morning weakness came as traders remained cautious ahead of the release of a key report on consumer price inflation on Thursday.

Economists expect the report to show consumer prices rose by 0.2 percent in July, matching the uptick seen in June. Core consumer prices, which exclude food and energy prices, are also expected to rise by 0.2 percent for the second straight month.

The annual rate of consumer price growth is expected to accelerate to 3.3 percent in July from 3.0 percent in June, while the annual rate of core consumer price growth is expected to hold at 4.8 percent.

Selling pressure has waned over the course of the session, as traders seem somewhat reluctant to make more significant moves.

Traders will be looking for the report to reinforce expectations that the Federal Reserve will leave interest rates unchanged next month.

CME Group’s FedWatch Tool is currently indicating an 86.5 percent chance the Fed will leave rates unchanged in September.

Sector News

Computer hardware stocks continue to see substantial weakness on the day, resulting in a 3.9 percent nosedive by the NYSE Arca Computer Hardware Index.

A steep drop by Super Micro Computer (SMCI) is weighing on the sector, with the information technology company plunging by 22.9 percent after reporting better than expected fiscal fourth quarter results but providing disappointing revenue guidance for fiscal 2024.

Significant weakness is also visible among airline stocks, as reflected by the 2.2 percent slump by the NYSE Arca Airline Index. The index has fallen to its lowest intraday level in two months.

Semiconductor and banking stocks have also moved to the downside, while energy stocks are seeing considerable strength amid an increase by the price of crude oil.

With crude for September delivery climbing $0.63 to $83.55 a barrel, the Philadelphia Oil Service Index is up by 1.8 percent and the NYSE Arca Oil Index is up by 1.7 percent.

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 fell by 0.5 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index climbed by 0.5 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index advanced by 0.7 percent and 0.8 percent, respectively.

In the bond market, treasuries are seeing modest strength after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 4.008 percent.

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