Stock indices capped a volatile day of trading on Wall Street with mixed results on Wednesday following the Federal Reserve said it was seeing an improvement in the economy, but not enough to begin to cut support measures.
The Standard & Poor’s 500 Index fell less than 0.1% following giving up short afternoon gains. The Dow Jones Industrial Average was down 0.4%, while the Nasdaq Composite was up 0.7%. The produce on the 10-year Treasuries settled at 1.23%.
The slide in technology stocks, makers of home and personal products and companies that rely on consumer spending affected the S&P 500 Index. The decline was kept under control by gains in telecom, healthcare and energy shares.
After the Federal Reserve’s final two-day policy meeting, the central bank said it had left its key interest rate unchanged and would persevere to purchase billions in bonds each month.
The Fed also noted that vaccines aid the economy, but dropped a sentence in its statement that it had included following its previous meeting in which it said those vaccines reduced the spread of COVID-19. This was the only reference to the delta variant causing an increase in COVID-19 cases in many hotspots in the United States and many other countries.
said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 fell 0.82 points to 4,400.64. The benchmark is still within 0.5% of Monday’s lofty. The Dow Jones index lost 127.59 points to 34930.93, while the Nasdaq rose 102.01 points to 14762.58 points.
Small-cap stocks outperformed the broader market, pushing the Russell 2000 Index to a acquire of 33.12 points, or 1.5%, to 2,224.95. The index was down 0.1% prior the Fed’s announcement this afternoon.
“Perhaps the concern is that the Fed will look more hawkish and hoist interest rates, which will have a more negative impact on little businesses that have to borrow more than big companies,” Stovall said.
The Federal Reserve has kept its benchmark short-term interest rate at nearly zero since March 2020, when the pandemic tore through the economy. The central bank also buys $120 billion in Treasuries and mortgages each month in an effort to motivate more borrowing and spending.
Analysts expect the Fed to move toward reducing bond purchases that have helped preserve interest rates low during the pandemic. The big interrogate for investors is the timing and pace of this downturn. The market is also weighing concerns about the pace of economic recovery, which could be hampered by the renewed spread of COVID-19.
“The pace will be slower than some people expected due to the delta variable,” said Greg Pasock, founder and CEO of AXS Investments. “We think we will persevere to see a larger opening rebound, but with a lot of volatility.”
There are also lingering concerns about whether inflation will persevere to rise, depending on the economic recovery and supply chain problems that have made some goods more expensive.
Away from the Federal Reserve, investors continued to review the latest batch of quarterly earnings reports.
Alphabet, Google’s parent company, made a standout, jumping 3.2% following reporting a gain increase final quarter. Pfizer also rose 3.2% following its earnings and revenue rose thanks to powerful sales of its COVID-19 vaccine and other drugs. The pharmaceutical company also raised its sales and gain forecasts for the year. Boeing shares jumped 4.2 percent following the aircraft maker reported a surprise quarterly gain, its first since 2019.
Strong earnings were not enough to lift the shares of other companies. McDonald’s shares fell 1.9 percent, although revenue was reported to rise and beat analysts’ expectations as dining rooms reopened. Facebook rose 1.5%, but lost those gains and more in extended trading despite reporting following the market closed that second-quarter earnings doubled, thanks to a massive increase in ad revenue.
Investors will focus a lot of their attention on what companies expect for the rest of the year. These forecasts, along with a mix of economic reports on gross domestic product, personal income and spending, should donate investors a clearer picture of the trajectory of the economic recovery as they approach August, Pasok said.
Markets gained in Europe and were mostly lower in Asia.