On Tuesday, the US benchmark equity indexes experienced a decline as market participants eagerly anticipated the release of the minutes from the Federal Reserve's July monetary policy meeting. The Nasdaq Composite saw a decrease of 0.3%, ending at 17,816.9. Meanwhile, both the Dow Jones Industrial Average and the S&P 500 dipped by 0.2%, closing at 40,835 and 5,597.1, respectively.
The energy sector marked the most significant decline, plummeting 2.7%, while consumer staples emerged as the leading gainers. The minutes from the Fed's July gathering are set to be unveiled on Wednesday. At the end of the previous month, the Federal Open Market Committee (FOMC) decided to keep its benchmark lending rate stable, ranging from 5.25% to 5.50%, marking its eighth consecutive pause.
During that meeting, the FOMC acknowledged that inflation remained "somewhat elevated," despite having shown signs of easing over the past year. Since March 2022, policymakers have been gradually raising interest rates to combat inflation, with the last hike occurring in July 2023. This ongoing trend has left financial markets on edge, particularly as they await further insights from Fed Chair Jerome Powell's address at the annual economic symposium in Jackson Hole, Wyoming, scheduled for Friday.
Investors are keenly seeking hints about any potential monetary easing. As the market tensions rise, the CME FedWatch tool indicates a 68% chance that the FOMC will opt for a 25 basis point rate cut next month, while the remaining probability suggests a more aggressive 50 basis point reduction. In specific market movements, the yield on US two-year notes fell by 7.6 basis points to 3.99%, while the 10-year Treasury rate decreased by 5.7 basis points, settling at 3.81%. Turning to corporate news, Boeing ($BA) witnessed a significant drop in its stock price, declining by 4.2%.
This marked the steepest decrease on the Dow and one of the worst declines on the S&P 500, following the company’s announcement that they have paused testing on the 777X aircraft due to findings regarding a structural component that did not meet expectations during a scheduled maintenance check. Lowe's ($LOW) also faced challenges, trimming its full-year outlook.
The home improvement retailer cited disappointing do-it-yourself sales and a tough macroeconomic backdrop, which contributed to its fiscal second-quarter results falling short compared to the previous year. Consequently, the company's shares ended the day down by 1.2%. On a more positive note, Palo Alto Networks ($PANW) emerged as the top performer on both the S&P 500 and the Nasdaq, with shares increasing by 7.2%.
The cybersecurity firm surprised investors with a notable uptick in its fiscal fourth-quarter earnings, fueled by revenue that exceeded expectations. Eli Lilly ($LLY) announced exciting developments regarding its drug Tirzepatide, noting that it "significantly" reduced the risk of progression to type-2 diabetes among obese or overweight adults, based on an extensive three-year study.
Lilly’s shares responded positively, climbing by 3.1% and positioning the company among the leading gainers on the S&P 500. In commodity news, West Texas Intermediate crude oil prices fell by 0.7%, settling at $73.82 per barrel. In terms of precious metals, gold prices saw an increase of 0.5%, reaching $2,554.40 per troy ounce, while silver rose by 0.6% to $29.49 per ounce. Market participants continue to monitor developments closely, particularly as the landscape can shift rapidly based on external economic indicators and corporate earnings reports..