On Wednesday, the S&P 500 was seesawing throughout the trading session, as investors moved towards the finish line of a gloomy quarter and a dismal month. Plus, it is also the worst first half of the year for the benchmark index of Wall Street since the first term of President Richard Nixon.
Wavering in indexes
Most of the trading session for the US stock indexes was spent wavering between negative and positive territory. The blue-chip Dow index managed to post a small gain at the end of the day, while the Nasdaq and the S&P 500 ended the day nominally lower.
Market analysts said that lack of direction was a problem with the markets, as the data was disappointing, but investors are also anticipating the earnings season because it can offer greater clarity about an economic slowdown.
The upside muscle came from market leaders like Amazon.com, Microsoft Corp., and Apple Inc., while economically sensitive chips, transports, and small caps were the underperformers in the market.
Worst performances
With the end of the second quarter of the year and the month only a day away, the S&P 500 was on its way to see the biggest percentage drop in the first half since 1970. Likewise, the Nasdaq was also set to record its worst performance during the first half of the year. Meanwhile, the Dow was preparing for its highest percentage drop from the month of January to June since the crisis.
All three Wall Street indexes were also on course to post their second straight quarterly decline, which had last occurred back in 2015. Market analysts said that the central bank had been forced to move from an easy monetary policy that was decades-old to a tight one, which is new for most investors. Therefore, they are repricing bets for an interest rate environment that is going to be quite different than it has been.
The numbers
There was a 0.27% raise, or 82.32 points in the Dow Jones Industrial Average, which took it to 31,029.31. The S&P 500 saw a drop of 0.07%, or 2.72 points, which brought it to 3,818.83, while the Nasdaq Composite had lost 0.03% or 3.65 points for the day to close at 11,177.89.
Five of the 11 sectors of the S&P 500 index lost their ground on the day, with the largest percentage drop recorded in energy stocks. The gains were led by healthcare stocks. There has been a rise of 1.606 basis points in the benchmark Treasury yields in the first half of 2022, which is the biggest jump seen since 1984. This is why there has been a 26% decline recorded in growth stocks that are sensitive to interest rates.
In recent days, officials of the Federal Reserve have reiterated their commitment to controlling inflation, which has set expectations of another 75 basis point increase in the interest rate in July. They have also expressed confidence that the monetary tightening policy will not trigger an economic recession because the economy remains strong.