U.S. stock indexes mostly ticked higher Wednesday after the Federal Reserve said it would keep interest rates steady near zero and retain its full range of tools to support the economic recovery during the pandemic.

How are stock benchmarks trading?

The Dow Jones Industrial Average
DJIA,
-0.32%

traded 42 points lower, or 0.1%, at 35,017, after swinging in and out of positive territory.

The S&P 500 index
SPX,
+0.06%

was up 10 points, or 0.2%. at 4,411.

Nasdaq Composite
COMP,
+0.79%

rose 120 points, or 0.8%, at 14,780.

On Tuesday, the Dow fell 85.79 points, or 0.2%, to 35,058.52. The The S&P 500 declined 20.84 points, or 0.5%, to 4,401.46 to snap a five-session winning run. The tech-heavy Nasdaq dropped 180.14 points, or 1.2%, to 14,660.58, its largest one day fall since May 12.

What’s driving the market?

Stocks got a boost after the Federal Reserve opted not to tighten monetary policy following a two-day meeting, reiterating that the path of recovery will depend on the virus.

Fed Chairman Jerome Powell stressed that vaccinations have been a major aid in the U.S. economic recovery, in an afternoon press briefing, but cautioned that their slowing pace and the delta variant of the coronavirus also remain risks.

Investors were hoping for clarity on when the central bank will begin tapering its $120 billion monthly bond purchases. While Powell said the topic continues to be studied by the central bank, he reiterated that any future decisions will remain data dependent, and that he’d also “want to see some strong jobs numbers.”

“I think it’s one more small step forward in their patient and methodical path” toward eventually scaling back monthly bond purchases, said Jason England, global bonds portfolio manager at Janus Henderson Investors, in an interview with MarketWatch.

“Obviously, they’ve made progress on the inflation front, but not as much on jobs.”

Powell reiterated that he expects inflation to eventually pull back closer to the Fed’s 2% annual target.

See: Fed says economy has ‘made progress’ toward standards for tapering, but not enough to start yet

And: Fed is walking ‘bit of a tightrope’ between downside risks and inflation

Beyond the Fed update, investors were bullish on the strength of second-quarter earnings reported thus far, with the earnings growth rate in the April through the end of June up nearly 80%, led by a 168% rate for the financial sector, according to data compiled by S&P Global Market Intelligence.

Social-media group Facebook FB, online payments processor PayPal PYPL, chip group Qualcomm QCOM and auto maker Ford F will report after the close of Wednesday’s session.

Robinhood, a popular trading app with individuals, is expected to price its initial public offering on Wednesday.

Read: Robinhood asking for $35 billion valuation in its IPO: Here are the 5 most eye-popping disclosures from the filing

In Asia, the selloff in technology stocks in Hong Kong and China abated on Wednesday, as the Hang Seng
HSI,
+1.54%

closed 1.5% higher after consecutive drops of at least 4% resulting from unexpected regulatory actions by the Chinese government.

On the public health front, the U.S. Centers for Disease Control and Prevention on Tuesday recommended that Americans — even those who are fully vaccinated — in parts of the country with “substantial or high” rates of COVID-19 go back to wearing masks in public indoor spaces as the delta variant of the coronavirus results in rising cases of COVID.

“The delta variant is an unknown right now,” said Eric Merlis, head of global markets trading at Citizens Bank. “It seems like stocks, for the most part, have looked past it, not ignored it.”

“It seems like something we are going to have to learn to deal with,” he told MarketWatch. “But that’s the positive outlook on it, and that opens up the possibility of more downside risk than upside risk.”

Google on Friday said it would postpone its return to office effort for most workers until mid-October in light of the delta variant, but also outlined a new policy where all workers eventually will need to be vaccinated at its U.S. campuses and globally.

On the data front, the U.S. trade deficit in goods rose 3.5% in June to record $91.2 billion, and advanced U.S. wholesale inventories climbed 0.8%, while retail inventories increased by 0.3% last month.

Which companies are in focus?

Shares of Boeing Co. BA rose almost 4.8% Wednesday, after the aerospace and defense giant swung to a surprise profit, amid higher commercial volume and lower period costs.

Pfizer IncPFE shares rose 3.5% after the company said Wednesday that a third dose of its COVID-19 vaccine likely provides further protection against the delta variant, which is more infectious and thought to be driving the recent surge in cases, hospitalizations, and deaths in the U.S.

McDonald’s CorpMCD reported second-quarter net income totaling $2.219 billion, or $2.95 per share, up from $483.8 million, or 65 cents per share, last year. Its stock was down 2.1%.

Bristol-Myers Squibb CoBMY said Wednesday it swung to a profit of $1.055 billion, or 47 cents a share, in the second quarter, after a loss of $85 million, or 4 cents a share, in the year-earlier period. Shares were up 2.1%.

Humana Inc. HUM shares skidded almost 4.6% lower after it reported second-quarter profit and revenue that beat expectations, but maintained its full-year adjusted earnings outlook, while saying it expects to record a $1 billion gain in the current quarter on its ownership of Kindred at Home.

Tapestry IncTPR said Wednesday that it will raise wages for all U.S. employees to at least $15 per hour, effective Sept. 5. Its shares were 0.9% lower.

Apple Inc.
AAPL,
-1.05%

shares slipped almost 1.2% after the iPhone maker said profit nearly doubled, but also projected a growth slowdown.

Microsoft Corp.
MSFT,
-0.07%

shares were 0.2% lower after the software giant topped $60 billion in annual earnings for the first time to end a record-breaking year.

Alphabet Inc.‘s
GOOGL,
+3.18%

Class A stock jumped 3.1% after the Google parent reported strong advertising sales that sent revenue and earnings well past analysts’ estimates.

Starbucks Corp. shares
SBUX,
-3.18%

fell over 2.6% after the coffee group swung to a quarterly profit, but also reported rising costs for Americas operations.

Walmart Inc. WMT said early Wednesday that it has partnered with Adobe Inc. ADBE to bring its technology to other businesses. 

Shares of Canadian cannabis company Tilray Inc. TLRY jumped 28% in trade Wednesday, after it swung to a profit in its fiscal fourth quarter.

How other assets are faring

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.248%

was up 2 basis points at 1.26%. Yields and debt prices move in opposite directions.

The ICE U.S. Dollar Index
DXY,
-0.09%
,
a measure of the currency against a basket of six major rivals, was up 0.3%.

Oil futures gained, with the U.S. benchmark CL00 gaining 1.1% Tuesday, while gold futures GC00 ended fractionally, or 0. 01%, lower.

In European equities, the Stoxx 600 Europe index SXXP closed 0.7% higher and London’s FTSE 100 UKX added 0.3%.

Elsewhere in Asian trade, the Shanghai Composite SHCOMP finished 0.6% lower, while Japan’s Nikkei 225
NIK,
-1.39%

fell 1.4%.

Barbara Kollmeyer contributed reporting

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