On Tuesday, US equity indexes displayed a mixed performance as the Dow Jones Industrial Average managed a slight gain, supported by the financial sector which led the intraday activity. In contrast, the technology sector experienced continued declines as investors awaited quarterly earnings reports from major players in the market after the closing bell. The Nasdaq composite fell by 1.3%, settling at 17,146.1, while the S&P 500 declined 0.7% to a close of 5,426.3.
Conversely, the Dow edged up 0.1%, reaching 40,585.2. Financials and energy sectors emerged as the primary gainers for the day, while technology and consumer staples found themselves in negative territory, indicating a bifurcated market sentiment. As the financial landscape shifts, all eyes will be on the Federal Open Market Committee (FOMC) which is expected to announce its latest monetary policy decision come Wednesday.
According to the CME FedWatch Tool, there is a striking 96% likelihood that the FOMC will maintain its current key interest rate steady on July 31. However, the market anticipates an 88% chance of a rate cut on September 18, as mounting evidence suggests that inflation may be transitioning to a sustainable trajectory towards the Fed’s target of 2%, juxtaposed with a softening labor market. On the economic front, the latest data revealed that US job openings dropped to 8.184 million in June, a decrease from the 8.230 million reported in May, as per the Bureau of Labor Statistics.
Despite this decline, the June figure exceeded analysts' expectations of 8 million openings outlined in a survey conducted by Bloomberg. These openings represent 4.9% of total employment, remaining unchanged from the previous month but showing a decrease from 5.5% a year prior. Further indicating economic resilience, the Conference Board’s consumer confidence index climbed to 100.3 in July, up from a downwardly revised figure of 97.8 in June and surpassing the expected 99.7 indicated by Bloomberg’s surveys. Treasury yields exhibited a downtrend, with the 10-year yield falling by 1.2 basis points to 4.16% and the two-year rate also decreasing by 1.2 basis points, settling at 4.37%. In the latest company updates, mega-cap technology giants Microsoft ($MSFT) and Advanced Micro Devices ($AMD) are scheduled to release their earnings reports following the market close.
Meanwhile, Howmet Aerospace ($HWM) reported Q2 results that surpassed expectations in terms of adjusted earnings and sales, leading the company to raise its guidance for 2024. This positive news propelled its shares 13% higher intraday, establishing it as the top performer on the S&P 500. On another note, West Texas Intermediate crude oil experienced a decline of 1.3%, bringing its price down to $74.81 per barrel.
This fluctuation reflects the ongoing volatility within the energy markets, further influenced by the broader economic indicators..