THE GIST (“THE WHAT”)
Opening lower, the S&P 500 index managed to erase the day’s losses on the back of a rally in mega-cap tech stocks to close modestly higher. The index snapped its three-days losing streak to close the choppy session near day’s highs at 4381.89, up 16.20 points (0.37%).
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 06/21: Powell Trying to Tame the Runaway Bull?
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
During his second day at the semi-annual monetary policy testimony, Powell reiterated the need for further rate hikes in an attempt to tame the stubborn inflation. Hawkish comments by Jerome Powell, coupled with surprise rate hikes in UK and Norway by 50 basis points pushed the U.S. 10-year Treasury yield higher by 7.4 basis points to settle at 3.793%.
Mega-cap tech stocks and chip stocks managed to shrug aside rising yields and rallied higher. Amazon, Alphabet, and Microsoft rose 4.26%, 2.16%, and 1.84% respectively. Apple Inc rose 1.65% to hit a new all-time high. FedEx Corp was another strong gainer, rising 3.14% ahead of its earnings release.
Capping the gains within the broader index, real estate and energy were the weakest performing sectors of the session amid rising yields and global recessionary concerns.
On the economic data front, initial unemployment claims came in slightly weaker-than-expected and the Conference Board’s Leading Economic index posted its 14th consecutive monthly decline, signaling that the Fed’s aggressive rate hikes could have started showing the intended impact of slowing the economy.