While the market battled to rebound from its worst day of the year, stocks declined modestly on Wednesday. Meanwhile, traders prepared themselves for the Federal Reserve’s most recent meeting minutes and more information about the central bank’s planned rate hikes.
20 points, or 0.1%, were lost by the Dow Jones Industrial Average. The S&P 500
and the Nasdaq Composite both fell 0.2%.
With drops of more than 1% each, Walmart and Cisco Systems were the main drivers of the Dow’s losses. After raising its annual earnings projection, the cybersecurity business Palo Alto Networks saw a 10.7% increase in its stock price. Coinbase, a cryptocurrency trading platform, outperformed revenue forecasts, but shares declined 2%.
At 2:00 p.m. EST, the Fed minutes are expected. Investors will examine the findings in search of clues about the central bank’s future course of rate hikes and its most recent 25 basis point increase.
Stocks experienced their worst day since 2023 on Tuesday as investors became increasingly fearful that the Fed will keep raising interest rates. Many earnings announcements, like Home Depot’s underwhelming performance, also raised questions about the state of the consumer.
Tuesday’s losses were led by the Nasdaq, which dropped 2.5%, and the S&P 500, which fell 2%. The Dow fell 2.06% and finished the year in the red. Consumer discretionary was the main contributor to the decline in all significant S&P sectors.
David Bahnsen, the chief investment officer of The Bahnsen Group, claimed that the market’s recent decline is a “direct response” to interest rates rising.
“Although the market retreat over the past few days may have felt sudden and big, we believe it has actually been moderate and entirely predicted,” the speaker continued, “given the quick and significant market surge seen throughout January and in part of February.”
The 10-year Treasury note’s yield increased throughout the day, reaching its highest level since November, which added to the market’s jitters. On Wednesday, Treasury yields modestly decreased.
James Bullard, president of the St. Louis Fed, issued a warning on Wednesday, saying that the central bank’s battle against inflation is far from over.
“The phrase “let’s slow down and feel our way to where we need to go” has gained popularity. During a live “Squawk Box” interview, Bullard stated, “We still haven’t arrived at the point where the committee established the so-called terminal rate. “After you reach that point, use your senses to navigate and determine what needs to be done. Once you arrive, you’ll be able to tell whether the next move should be up or down.