Benchmarks closed in the negative territory on Wednesday as investors awaited the inflation report due on Thursday. Additionally, the decline in the benchmark 10-year Treasury yield pushed investors away from banking and financial stocks to yield-sensitive assets like technology.
The Dow Jones Industrial Average (DJI) fell 152.68 points, or 0.4%, to close at 34,447.14 and the S&P 500 fell 7.71 points, or 0.2%, to close at 4,219.55. The Nasdaq Composite Index closed at 13,911, shedding 13.16 points, or 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased 4.8%, to close at 17.89. Declining issues outnumbered advancing ones for 1.12-to-1 ratio on the NYSE, while a 1.13-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
The Nasdaq closed in the red after touching an intraday high of 14,003.50, and also booked its first loss in four sessions. Its biggest decliner was Sirius XM Holdings Inc. SIRI, closing 3.4% lower on Wednesday. Big tech firms like Netflix, Inc. NFLX and Facebook, Inc. FB also closed in the red, declining at least 1% for the session. Facebook flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Dow booked its third straight day of loss, with biggies like Caterpillar Inc. CAT, The Boeing Company BA and American Express Company AXP closing 2.3%, 1.9% and 1.5% lower, respectively. The S&P 500 retreated from the record, pulling back from an intraday high of 4,237.09. Seven of the 11 major sectors of the broader index closed in the red, with financials and industrials sectors registering more than 1% decline that put the health sector’s 1% gain out of sight.
Overall, the S&P 500 posted 52 new 52-week highs and two new lows, while the Nasdaq Composite recorded 126 new highs and 14 new lows. A total of 11.53 billion shares were traded on Wednesday, higher than the last 20-session average of 10.74 billion.
Markets Struggle to Gain as Investors Wait for Inflation Data
On Wednesday, investors remained vigilant and awaited the reading on inflation to gauge price pressure as the economy rebounds from the pandemic-led recession. The inflation metric, the Consumer Price Index (Core CPI and CPI) is scheduled to be released on June 10. The consensus estimates of core CPI is a 0.5% rise, while CPI could gain 0.4% in May.
However, the decline in the U.S. Treasury yields to its lowest levels since March indicates that investors are wading off inflation fears for the time being. The 10-year Treasury note closed 3.8 basis points lower at 1.489%, its lowest level since Mar 3. The decline in yield weighed on the interest-sensitive financials sector. Shares of Wells Fargo & Company WFC closed 1.5% lower, while JPMorgan Chase & Co. JPM and Bank of America Corporation BAC shed 1.3% on Wednesday.
The meme stocks rally continued on Wednesday, as traders picked up Clean Energy Fuels Corp. CLNE, pushing the stock 31.5% higher, while Clover Health Investments, Corp. CLOV that topped charts on Tuesday fell 23.6% yesterday.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
The Boeing Company (BA) : Free Stock Analysis Report
Bank of America Corporation (BAC) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
Sirius XM Holdings Inc. (SIRI) : Free Stock Analysis Report
Wells Fargo & Company (WFC) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Clean Energy Fuels Corp. (CLNE) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Clover Health Investments, Corp. (CLOV) : Free Stock Analysis Report
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