The US benchmark equity indexes exhibited a mixed performance during intraday trading as investors scrutinized the latest economic data and prepared for the Federal Reserve's impending monetary policy decision. The Dow Jones Industrial Average and the S&P 500 both experienced a slight decline of 0.1%, settling at 41,590.1 and 5,630.9, respectively, by midday Tuesday.
Meanwhile, the Nasdaq Composite showed a modest rise of 0.2% to reach 17,619.4. Notably, the health care sector witnessed the most significant dip among the various industry sectors, whereas energy stocks emerged as the frontrunners in gains. On the economic front, US retail sales for August defied Wall Street's expectations by rising, despite a deceleration in growth due to declines in gas station and motor vehicle sales, as indicated by data from the Census Bureau.
Experts at BMO Capital Markets commented, "Based on the health of consumer spending alone, the Fed would have little reason for an aggressive start to the easing cycle, and we continue to lean toward a smaller move," reflecting cautious optimism regarding consumer behavior. Further contributing to the positive sentiment, confidence among US homebuilders improved in September for the first time in five months, driven by decreasing mortgage rates, according to insights from the National Association of Home Builders (NAHB) and Wells Fargo.
NAHB Chairman Carl Harris remarked, "Thanks to lower interest rates, builders now have a positive view for future new home sales for the first time since May," signaling a possible turnaround in the housing market. In the bond market, the US two-year yield increased by 3.5 basis points, reaching 3.59% during intraday trading, while the 10-year rate saw a rise of 2.6 basis points, climbing to 3.65%.
Investors are currently observing a 65% probability that the central bank's monetary policy committee will opt for a reduction in its benchmark lending rate by 50 basis points at the upcoming meeting, with the remaining odds favoring a 25-basis-point cut, according to analysis from the CME FedWatch tool. "The committee is likely to maintain a base case of 25-basis-point cuts beginning this week, with careful consideration but not an absolute commitment to action at future meetings," stated Stifel in a note to clients on Tuesday. In commodity markets, West Texas Intermediate crude oil prices rose by 2.1% to $71.53 per barrel during intraday trading, reflecting ongoing volatility in energy markets. Shifting focus to individual companies, shares of Accenture ($ACN) fell significantly by 4.7%, marking the steepest decline within the S&P 500.
Reports from Bloomberg indicated that the company is prolonging most staff promotions until June, based on information from unnamed sources. Additionally, Accenture announced an investment in the technology firm Martian, showcasing its commitment to growth despite current challenges. On a positive note, Moderna ($MRNA) emerged as the best performer on both the S&P 500 and the Nasdaq, with shares surging by 4.6% after the company announced it received Health Canada's approval for its updated Spikevax COVID-19 vaccine, which targets the KP.2 sub-lineage of SARS-CoV-2 in individuals aged six months and older. Intel ($INTC) shares also gained traction, rising by 2.9% to become the top performer on the Dow and among the best on the Nasdaq.
The chipmaker recently outlined plans to transform its manufacturing operations into an independent subsidiary while expanding its partnership with Amazon.com's ($AMZN) cloud computing division to create custom artificial intelligence chips. In tandem with this news, Amazon shares saw an intraday increase of 1.1% on Tuesday. In the precious metals market, gold experienced a decrease of 0.6%, trading at $2,594.90 per troy ounce, while silver saw a small dip of 0.5%, priced at $30.97 per ounce, reflecting the varied investor sentiments across different markets. Overall, the latest developments illustrate the complex interplay between economic indicators and market reactions, as investors position themselves ahead of significant policy decisions from the Federal Reserve..