SPY - S&P 500 Nasdaq Set To Open Lower As Tech Small-Caps Shudder On High Bond Yields: Analyst Sees Triple Whammy For Corporate Profits | Benzinga
An in-line Federal Reserve decision failed to boost market sentiment, leading to negative signals in index futures on Thursday. Small-cap and tech stocks faced particular weakness, exacerbated by the 10-year Treasury note yield reaching a fresh 16-year high, which could diminish risk appetite, especially in growth-focused tech stocks.
Several key economic indicators related to the labor market, manufacturing sector, and leading economic index could influence market sentiment. Negative news on these fronts might be interpreted as positive by investors, as it could lead to expectations of a more lenient stance from the Fed. Additionally, the lack of an agreement among lawmakers on a funding deal to avert a government shutdown is a concern for traders.
Earnings reports from FedEx Corp. (NYSE:FDX) have been positive, and traders may also show interest in a significant central bank decision from Europe.
Cues From Wednesday’s Trading:
Stocks closed lower on Wednesday as traders assessed the Federal Reserve’s decision and the central bank’s outlook on interest rates. Major indexes mostly rose before the Fed’s announcement, except for the Nasdaq Composite Index. While the market initially responded positively to the Fed’s rate pause, sentiment turned negative after the release of the dot-plot curve and Federal Reserve Chair Jerome Powell‘s comments during the press conference.
Consequently, major indexes, including the Dow Industrials, S&P 500, and Nasdaq Composite, closed lower for a second consecutive session, reaching nearly one-month lows. The Russell 2000 Index declined in the past four sessions, hitting a 3-1/2 month low.
Tech stocks, especially communication services and IT stocks, suffered the most significant losses, while defensive sectors like utilities, healthcare, and consumer staples showed some strength.
...