Bears took the reins on Wednesday and turned a Fed decision day into a sharp slide for the S&P 500 index futures, with dip-buyers showing up midday only to be overrun by the time the dust settled.
Overnight, bulls and bears oscillated around unchanged, and the early high of 7501 quietly turned out to be the level that stuck for the rest of the day. A morning interview in which Trump indicated US strikes will continue against Iran handed bears an edge before the bell.
After some initial chop, the regular session soon belonged to the bears. The first wave of selling carried the index futures past the recent triple-bottom, though bulls managed to find some support near the psychological 7400 area. Once that support broke, they regrouped near 7370 and started to bounce back. The FOMC interest-rate decision, announced as unchanged, handed bulls a quick pop, and as the Fed Chair press conference began they pressed the rally back up near the premarket high.
Kevin Warsh’s initial comments seemed more dovish, but his tone turned progressively more hawkish as the press conference went on. Once the conference ended, the CME FedWatch tool showed increased probabilities for the current rate being maintained in the following meetings, while the probability of a single rate hike by the end of the year notably went up. Bears had already begun selling during the conference, and once Warsh’s speech was over the selling continued without much contest, slicing through the earlier support levels. The session concluded very near the intraday low at 7351.25, losing 114 handles. The selloff continued after hours to a low of 7324.
Tomorrow, market participants can look forward to June’s Personal Consumption Expenditures (PCE) report and Q2’s GDP at 8:30 AM ET, along with another load of earnings reports in the morning and evening. After Thursday’s close, two more top components are expected to report, including Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN).
Among the top components of the index, Walmart Inc (NYSE: WMT) emerged as the biggest gainer. The retail giant advanced by $1.12 or 0.99% to close at $114.22 for the day.
That performance was still over two percent better than the cash index’s decline of 1.54%.
Conversely, the biggest loser ended up being NVIDIA Corp (NASDAQ: NVDA). For the day, the chip designer declined by $7.00 or 3.55% to close at $190.01.
