Mixed Up Ahead of Interest Rate Hike, Nasdaq Fell 0.43%

This week’s ‘The Most Important Week of Summer’… A series of big announcements. Jerome Powell’s comments after the interest rate hike announcement are key

The New York Stock Exchange was mixed ahead of major corporate earnings reports and the possibility of an interest rate hike by the Federal Reserve.

At the New York Stock Exchange (NYSE) on the 25th (Eastern time, hereinafter local time), the Dow Jones Industrial Average finished trading at 31,990.04, up 90.75 points (0.28%) from the battlefield.

The Standard & Poor’s 500 Index rose 5.21 points (0.13%) to 3966.84, up 5.21 points (0.13%) from the battlefield.

Among the 11 sectors of the S&P 500, △Consumer Discretionary Goods -0.85% △Technology -0.61% △Communications Services -0.28%. In addition, △Consumer essentials 0.46% △Energy 3.71% △Finance 0.65% △Healthcare 0.55% △Industry 0.47% △Raw material 0.43% △Real estate 0.07% △Utilities 1.26%.

This week is known as ‘the most important week of summer’. Major events such as the regular meeting of the Federal Open Market Committee (FOMC) in July and the announcement of the US second-quarter gross domestic product (GDP) are expected. About a third of companies listed on the S&P 500, including Apple, Alphabet and Microsoft, also report quarterly earnings. This earnings is expected to have a significant impact on the stock price as investors are anxious about the possibility of a recession.

“Investors are expecting negative second-quarter GDP to be released on Thursday,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC. “This is an unofficial sign of a recession.” “The Fed will announce a rate hike of 0.75 percentage points on Wednesday, but it will present a rather moderate ton for further rate hikes going forward,” he said.

Some investors fear an aggressive rate hike could plunge the US economy into recession. As such, Fed Chairman Jerome Powell’s comments after the rate hike announcement are likely to be the key to determining the direction of the market, Reuters reported.

Quincy Crosby, chief global strategist at LPL Financial, said: Corporate earnings reporting is very important to the market, especially given the (recent) attempt by the Nasdaq to rise. The Nasdaq, which led the market decline this year, rose more than 3% last week. Investors are concerned about corporate earnings deterioration due to inflation, rising interest rates, a strong dollar and supply chain problems.

Tech stocks fell on the snap news. Snap’s stock fell 39% in one day as its second-quarter earnings fell far short of expectations due to a drop in ad sales last week. Meta platform fell 1.5% and Amazon fell 1.1%. Apple, Microsoft and Alphabet all closed slightly lower.

Mining company Newmont shares plunged 13.23% after reporting a more than 40% year-over-year profit decline as a result of falling gold prices. Philips shares fell 7.2% after reporting lower-than-expected earnings due to China’s lockdown policy and other reasons.

Energy stocks surged as oil prices rose. Shares of Marathon Oil and APA surged more than 6% each. Diamondback Energy and Occidental Petroleum rose about 5% and Chevron about 3%.

Oil prices rose and Treasury yields rose slightly as investors prepared for the Fed’s rate hike. The 10-year government bond yield stood at 2.8105% and the 2-year government bond yield stood at 3.0266%. The dollar index fell 0.253%.

Oil prices rose on the back of a weak US dollar. Investors weighed between fears about supply and the prospect that a US rate hike could dampen demand.

On the New York Mercantile Exchange on the same day, the price of West Texas Intermediate (WTI) futures for August contract finished at $96.70 per barrel, up 2.11% from the previous day. September Brent crude on the London ICE Futures Exchange rose 1.9% to $105.15 a barrel.

Spot gold fell 0.5% to $1718.9 an ounce, while Bitcoin fell 2.16% to $22,108.16.