On Wednesday, U.S. stocks closed mixed after the Federal Reserve hinted at keeping interest rates near zero through 2022. The Nasdaq 100 charged 127 points (+1.3%) higher to 10094, a fresh record close. The Dow Jones Industrial Average lost another 282 points (-1.0%) to 26989, and the S&P 500 dropped 17 points (-0.5%) to 3190.
S&P 500 Index Daily Chart
Source: GAIN Capital, TradingView
Software & Services (+2%), Technology Hardware & Equipment (+1.59%) and Semiconductors & Semiconductor Equipment (+0.92%) sectors performed the best, while Banks (-5.75%), Energy (-4.92%) and Consumer Services (-3.23%) sectors lagged behind.
Tesla (TSLA +8.97%), Apple (AAPL +2.57%) and Amazon.com (AMZN +1.79%) closed at record highs.
On the technical side, about 58.3% (68.8% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 93.3% (94.7% in the prior session) were above their 20-day moving average.
As expected, the Federal Reserve kept its key rate unchanged at 0.00%-0.25%. At the same time, the central bank said it expects the U.S. economy to contract by 6.5% this year and rebound 5.0% in 2021.
Official data showed that U.S. Consumer Prices declined 0.1% on month in May (+0.0% expected).
Later today, Producer Price Index (+0.1% on month in May expected), Initial Jobless Claims (a fall to 1.550 million expected) and Continuing Claims (a fall to 20.000 million expected).
European stocks still lacked upward momentum, with the Stoxx Europe 600 Index slipping 0.4%. Germany's DAX fell 0.7%, France's CAC dropped 0.8%, and the U.K.'s FTSE 100 edged down 0.1%.
U.S. Treasury prices remained firm after the Fed projected no interest-rate rises through 2022. The benchmark 10-year Treasury yield sank further to 0.744% from 0.829% Tuesday.
Spot gold jumped $23.00 (+1.4%) to $1,737 an ounce, extending its winning streak to a third session.
Oil prices climbed higher despite U.S. Energy Information Administration's weekly report that the country's crude-oil stockpiles rose to a record level of 538.1 million barrels. U.S. WTI crude oil futures (July) added 1.6% to $39.56 a barrel.
On the forex front, the ICE U.S. Dollar Index slid 0.4% on day to 96.05, amid Fed's commitment to low interest rates and asset purchases.
EUR/USD gained 0.3% to 1.1380, posting a three-day rally.
GBP/USD edged up 0.1% to 1.2747.
USD/JPY dropped 0.8% to 106.91, down for a third straight session. This morning, government data showed that Japan's first quarter BSI All Industry Business Condition Index for large firms sank to -47.6 (-38.4 expected) from -10.1 in the prior quarter.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.