Stocks have shown a somewhat uninspiring performance during Wednesday's trading session, following Tuesday's substantial sell-off. Major stock indices spent the day fluctuating around the previous closing mark.
At the moment, major indices are displaying mixed results. The Dow Jones is up 118.01 points or 0.3 percent, standing at 37,933.93, while the Nasdaq has dropped 17.85 points or 0.1 percent down to 15,639.97. The S&P 500 is also down, losing 6.74 points or 0.1 percent, landing at 5,028.95.
This hesitant trading activity on Wall Street might be a result of traders' reluctance to make major moves in anticipation of the Federal Reserve's monetary policy announcement later today.
While it is widely predicted that the Fed will uphold the current interest rates, traders are keenly awaiting the wording of the associated statement and Federal Reserve Chairperson Jerome Powell's press conference after the meeting.
John Lynch, Chief Investment Officer at Comerica Wealth Management, commented on the market sentiment, saying that traders had shifted from hoping for monetary accommodation to accepting persistently higher rates following Tuesday's late sell-off. He added that today's significant news might likely arise from the Treasury's refund announcement, not the Federal Open Market Committee (FOMC).
In the U.S. economic update, payroll processing firm ADP reported that private-sector job growth in April exceeded predictions—rising by 192,000 jobs after a revised jump of 208,000 jobs in March. Economists had forecasted a job increase of 175,000 against March's original report of 184,000 new job positions.
ADP's chief economist, Nela Richardson, said April's hiring was widely spread except for the information sector, which showed the least growth in pay since August 2021 and job losses.
On another note, the Institute for Supply Management (ISM) reported a slight drop in U.S. manufacturing activity in April. According to the ISM, its PMI has slipped to 49.2 in April from 50.3 in March, indicating contraction. Their expectations were a slight decline to 50.0.
In terms of sector news, semiconductor stocks, in particular, underperformed, pulling the Philadelphia Semiconductor Index down by 2.4 percent. Advanced Micro Devices (AMD) was down 7.7 percent as the chipmaker gave second-quarter sales guidance that met analysts' estimates rather than overperforming despite reporting slightly better-than-expected first-quarter results.
Also, considerable weakness was detected among PC hardware stocks, reflected by a 2.2 percent drop in the NYSE Arca Computer Hardware Index. The major setback was Super Micro Computer stocks, which dived 17.5 percent because the company's fiscal third-quarter revenues came in weaker than expected.
Oil producers, natural gas, and airline stocks also recorded notable drops. In contrast, software and gold stocks appreciated significantly.
In international markets, Japanese and Australian stocks fell, and most Asia-Pacific markets were closed for Labor Day. European markets, too, largely remained closed; however, UK's FTSE 100 Index experienced a minor drop of 0.3 percent.
In the bond market, U.S. Treasuries are making some recovery from the previous session's noteworthy decline. Consequently, the 10-year Treasury note yield fell 2.9 basis points to 4.657 percent.
