U.S. stocks saw a decline during midday trading in New York, which could potentially end the streak of consecutive daily gains. This comes as investors assess the economic outlook.
Commodity prices continued to weaken, with crude oil prices reaching as low as $75 per barrel, approaching levels not seen since mid-July. Gasoline prices also dropped below $2.2 per gallon, marking new lows for 2023.
Investors turned to bonds for safety, resulting in a decline in Treasury yields. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) saw a surge of 1.2%, reaching its highest level since late September.
However, Jerome Powell’s speech today did not mention monetary policy or provide any economic-related remarks, which left investors disappointed.
In Wednesday’s trading, the S&P 500 Index decreased by 0.3% after experiencing seven consecutive sessions of gains. The tech-heavy Nasdaq 100 was down 0.4%, on track to end its eight-day winning streak. Blue-chip stocks in the Dow Jones Industrial Average also saw a 0.4% decrease, while small caps in the Russell 2000 tumbled by 1.3%.
According to Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, there are several positive factors that could benefit the market. He mentioned slower but still healthy growth, lower rates and inflation, increased earnings, and stabilized valuations.
In major U.S. equity ETFs, the SPDR S&P 500 ETF Trust (NYSE:SPY) decreased by 0.3% to $435.44, the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell 0.3% to $340.44, and the Invesco QQQ Trust (NASDAQ:QQQ) dropped 0.4% to $371.
Among S&P 500 sector ETFs, the Real Estate Select Sector SPDR Fund (NYSE:XLRE) and the Technology Select Sector SPDR Fund (NYSE:XLK) were the only ones slightly in the green, with a 0.1% increase. The Energy Select Sector SPDR Fund (NYSE:XLE) performed poorly due to the decline in oil prices.
In upcoming economic data, Fed Governor Lisa Cook mentioned various risks, including asset valuations, financial sector leverage, funding risks, Chinese economic slowdown, and geopolitical tensions in the Middle East and Russia-Ukraine war. The Mortgage Bankers Association reported a rise in applications and a significant drop in the average mortgage rate.
Furthermore, various companies reported their earnings, with Warner Bros. Discovery, Inc. (NASDAQ:WBD) experiencing a 16% decline and Paramount Global (NYSE:PARA) falling by 7.6%.
Commodity-wise, crude oil fell by 2.5% to $75 per barrel, while Treasury yields decreased. The dollar strengthened, European equity indices closed higher, gold and silver prices fluctuated, and Bitcoin saw a slight decrease.
