U.S. Stocks Regaining Ground Following Yesterday’s Pullback
Following the sharp pullback seen in the previous session, stocks have moved mostly higher in morning trading on Wednesday. The major averages have all shown moderate moves back to the upside on the day.
Currently, the major averages are off their highs of the session but remain in positive territory. The Dow is up 155.73 points or 0.5 percent at 30,861.96, the Nasdaq is up 38.76 points or 0.3 percent at 11,463.81 and the S&P 500 is up 20.60 points or 0.5 percent at 3,876.53.
The rebound on Wall Street partly reflects bargain hunting, as traders pick up stocks at reduced levels after yesterday’s weakness dragged the major averages down to two-month closing lows.
Buying interest remains somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy decision this afternoon.
With the announcement looming, CME Group’s FedWatch Tool is currently indicating an 82.0 percent chance of a 75 basis points rate hike and an 18.0 percent chance of a 100 basis point rate hike.
The size of the rate increase is likely to be in the spotlight, although traders are also likely to pay close attention to the accompanying statement for clues about the outlook for future rate hikes.
In U.S. economic news, the National Association of Realtors released a report showing existing home sales edged down by much less than expected in the month of August.
NAR said existing home sales declined for the seventh consecutive month but dipped by a relatively modest 0.4 percent to an annual rate of 4.80 million in August after plummeting by 5.7 percent to a revised rate of 4.82 million in July.
Economists had expected existing home sales to tumble by 2.3 percent to an annual rate of 4.70 million from the 4.81 million originally reported for the previous month.
Despite falling by much less than expected, existing home sales still dropped to their lowest level since spring of 2020.
Semiconductor stocks have shown a strong move to the upside in morning trading, with the Philadelphia Semiconductor Index jumping by 1.7 percent after ending the previous session at its lowest closing level in well over two months.
Considerable strength is also visible among networking stocks, as reflected by the 1.6 percent gain being posted by the NYSE Arca Networking Index. The index is also bouncing off a nearly two-month closing low.
Housing stocks are also turning in a strong performance on the day, resulting in a 1.4 percent advance by the Philadelphia Housing Sector Index.
Interest rate-sensitive utilities and commercial real estate stocks have also moved to the downside, while airline stocks are moving sharply lower.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.4 percent, while Hong Kong’s Hang Seng Index plunged by 1.8 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the French CAC 40 Index has advanced by 0.8 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.6 percent.
In the bond market, treasuries are seeing modest strength after moving notably lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 3.557 percent.
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