The US stock markets finished lower after the FOMC meeting minutes showed that the Fed’s rate hike campaign will not likely stop until inflation is within reach of 2%. While all three benchmark indices ended in the red, growth sectors continued their resilient moves, with Meta Platform up 3% to a 52-week high after the company launched a Twitter-like social app, Threads. The upcoming earnings season will be critical for the market trend as their growth trajectory will be a key parameter for this sector’s prospect.
Bond markets continued to price in more rate hikes by the Fed, with the yield on the 10-year Treasury jumping seven basis points to 3.94%, the highest level since early March. And the US dollar index strengthened to above 103, pressing on gold prices. But crude oil futures extended gains after Saudi Arabia and Russia confirmed plans for further output cuts.
Equity markets across Asia extended losses on Wednesday as China’s restriction on key metals exports pressed on sentiment. Futures are pointing to a lower open across Asian equity markets. The ASX 200 futures were down 0.50%, the Hang Seng Index futures fell 0.330%, and the Nikkei 225 slid 0.69%.
Price movers:
- Diverging moves in the S&P 500 continued as growth sectors stayed resilient while cyclical stocks were under pressure. 7 out of 11 sectors finished lower in the S&P 500, with Materials leading losses, down 2.5%. Industrials, Energy, and Financials were also down due to economic uncertainties and a firmed USD. Communication Services outperformed broad markets, up 1.21%, thanks to Meta’s rally.
- Meta Platforms’ shares rose 3% to above $294, reaching a 52-week high following the social app, Threads’ debut. Meta’s stocks rose about 240% from their trough in November 2022. However, the chart shows that a bearish divergence has been brewing since early June, indicating a potential near-term pullback from a technical perspective.
- Moderna reached a deal to make messenger RNA vaccines for Covid- 19 for China as the company saw profit drop after the boom during the pandemic. The drug maker has to seek new growth potentials amid a slump in its share price, which declined more than 7% from the peak in August 2021.
- The WTI futures finished above the 50-day moving average for the first time since late April as crude oil prices rose for the second straight trading day after Sudi and Russia announced further voluntary output cuts. Sudi Arabic indicated extending its 1 million barrel-per-day (bpd) cut to August, and Russia will reduce 500,000 bpd in exports during the same month.
ASX and NZX announcements/news:
- No major announcements.
Today’s agenda:
- US ISM Services PMI & JOLTS Job Openings
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