Stocks End Lower In a Volatile Session
3:53 pm Wednesday, June 01st, 2022
U.S. stocks were in the red on Wednesday as investors bet that the latest economic data would do nothing to push the Federal Reserve off track from its aggressive interest rate hiking cycle aimed at taming run-away inflation.
The first half of today’s session has seen a continuation of yesterday’s selling amid losses in most sectors while economic data released this morning was mixed relative to estimates. The early weakness has the S&P 500 trading just above its closing level from Thursday with heavily weighted financials (-2.2%) showing the widest loss.
Today’s underperformance in bank stocks comes after the industry group rallied strongly off a 13-month low during the last few days of May. JPMorgan Chase (JPM) CEO Dimon said during an appearance at a conference that investors should “brace” themselves for an economic hurricane. Shares of JPM have returned to their 50-day moving average (128.31), tracking their first loss in seven days.
Like financials, the health care sector is feeling pressure from losses in all of its components while top-weighted technology (-0.8%) trades a bit ahead of the broader market.
Salesforce (CRM) and HP (HPQ) hold solid gains after reporting better than expected results while most other tech components trade lower. Chipmakers are among the laggards, as the PHLX Semiconductor Index falls 2.6%.
The lightly-weighted utilities sector (-0.8%) holds the slimmest loss while energy (+1.2%) outperforms by a solid margin as crude oil climbs for the fifth consecutive day, trading up $1.59, or 1.4%, at $116.26/bbl.
Treasuries trade sharply lower, extending their losses from Tuesday. The 10-yr yield is up ten basis points at 2.94%, reaching a two-week high.
The May ISM Manufacturing Index increased to 56.1% (consensus 54.9%) from 55.4% in April. A number above 50.0% is indicative of expansion. May marked the 24th consecutive month of expansion in the manufacturing sector, although the May reading was the second lowest since September 2020.
