Markets closed mostly higher on Tuesday as investors awaited Powell’s testimony. Market watchers expect that the Fed Chief would shed some light on the future of the U.S. monetary policy. While, the Dow ended in the red for the third session on the trot, both the S&P 500 and the Nasdaq finished in the positive territory.
The Dow Jones Industrial Average (DJI) decreased 0.1%, to close at 26,783.49. The S&P 500 increased 0.1% to close at 2,979.63. The tech-laden Nasdaq Composite Index closed at 8,141.73, gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) increased 5% to close at 14.66. Decliners outnumbered advancers on the NYSE by a 1.30-to-1 ratio. On Nasdaq, a 1.11-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow dipped 22.7 points to close in the red for the third successive day. Losses for the 30-stock index were broad-based. Shares of 3M Company MMM declined 2.1% and weighed on the Dow. 3M carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 added 3.7 points to end in positive territory. Of the 11 major sectors of the S&P 500, eight ended in the green, with communication services and real estate stocks leading the advancers. Communication Services Select Sector SPDR Fund (XLC) and The Real Estate Select Sector SPDR Fund (XLRE) increased 0.6% and 0.5%, respectively on Tuesday.
Meanwhile, the Nasdaq gained 43.4 points to also close in the green. Gains for the Nasdaq were broad-based. Shares of Facebook FB and Netflix NFLX gained 1.8% and 1%, respectively and boosted the tech-heavy index.
Investors Await Fed’s Interest Rate Update
Fed Chief Jerome Powell is slated to testify in front of the House Financial Services Committee on Jul 10. This has kept investors on tenterhooks as they await the central bank’s next move related to the benchmark interest rate as Powell might provide some clues regarding future of the country’s monetary policy.
Stronger-than-expected jobs data for June had resulted in market watchers scaling back their hopes of a rate cut later in the month. Although, it is still largely expected that the Fed will reduce the benchmark interest rates in the next meeting. The CME FedWatch Tool predicts a 97.6% chance of a rate cut later this month.
On the economic data front, the Job Openings and Labor Turnover Survey (JOLTS) released by the Bureau of Labor Statistics, the number of job openings in the U.S. economy edged down to 7.3 million jobs in May.
Meanwhile, National Federation of Independent Business stated that its small business optimism index decreased to 103.3 in June from 105 in May.
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