S&P 500 remains pressured and surrendered 3800 as investors brace for Fed

  • The S&P 500 and the Dow Jones recorded losses in a risk-off market mood.
  • The Nasdaq Composite is recovering some ground and remains above the 10,000 figure.
  • Expectations of a bigger than foreseen Fed rate hike shifted sentiment sour, underpinned the greenback.
  • US Treasury yields reach fresh multi-year highs, above the 3% threshold.

US stocks continue their rout, losing between 0.26% and 0.56%, except for the heavy tech Nasdaq Composite, which pares some of its losses, up by 0.25%.

US Fed expectations of a larger rate increase weighed on sentiment, US equities fell

The S&P 500 and the Dow Jones Industrial Average are slipping 0.26% and 0.56% each, sitting at 3,739.23 and 30,345.10, respectively, at the time of writing. Meanwhile, the Nasdaq Composite is rising 0.25%, up at 10,836.09.

In the meantime, the US Dollar Index advances to a fresh 20-year high at around 105.433, gaining 0.22%, on Tuesday. US Treasury yields elevated remain. The 10-year benchmark note rate is at 3.441%, up to six basis points, reflecting traders’ expectations of a 75 bps rate hike.

Investors’ mood remains negative, weighed by a WSJ news that revealed that US Fed officials might “surprise” the markets with a larger than expected 0.75% bps rate hike. Also, US economic data the wires were mixed, led by the rise in the Producer Price Index, which showed that prices surged in May by 10.8% YoY, though lower than expected, indicating that it’s not slowing down, further cementing the Fed’s rate hike.

Later, the US IBD/TIPP Economism optimism for June dropped to 38.1 from 41.2 in May. Raghavan Mayur, president of TechnoMetrica, who directed the poll, wrote, “The June numbers are quite bleak. Most Americans (53%) feel we are now in a recession, and two-thirds (67%) feel the economy is not improving.

In terms of sector specifics, the leading gainers are Energy, up 1.9%, propelled by high oil prices, followed by Technology and Consumer Discretionary, each recording gains of 0.29% and 0.05%, respectively. Contrarily, Utilities, Consumer Staples, and Health are losing 3.04%, 1.68%, and 1.2% each.

In the commodities complex, the US crude oil benchmark, WTI, is gaining 0.88%, trading at $122.00 BPD, while precious metals like gold (XAU/USD) are falling 0.99%, exchanging hands at $1813.45 a troy ounce, as US Treasury yields , keep rising to multi-year highs.

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