THE GIST (“THE WHAT”)
The S&P 500 index closed the muted session modestly lower at 4446.81, down 8.77 points (-0.20%). Hawkish FOMC meeting minutes pushed yields higher and stocks lower. Weaker-than-expected economic data out of U.S. and China further dampened market sentiment ahead of key economic data releases this week.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 07/05: FOMC Meeting Minutes
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
Price action in today’s session was muted as investors keenly await key economic data releases this week. Fed’s June meeting minutes showed that while few Fed officials favored interest rate hike last month, almost all officials expect further rate hikes this year amid tight labor market and sticky inflation that is showing no signs of slowing down to Fed’s 2% target rate. The 10-year Treasury yield jumped 8.9 basis points higher to settle at 3.943%.
Meanwhile, economic data out of China came in weaker-than-expected. China Caixin June Services PMI index fell to a 5-month low. New orders for US manufactured goods also rose less than expected in the month of May, sparking concerns of slowing global economy. Materials sector led the day’s losses within the broader index. Generac Holdings was the worst decliner of the session, slumping 8.05% following reports of insider selling.
Semiconductor stocks fell across the board after China announced that it would limit exports of gallium and germanium that are key metals used widely by semiconductor industry as tensions grow between Beijing and Washington over access to high-tech microchips. ON semiconductor, Intel Corp, Lam Research and Qualcomm, all fell more than 3% each. On the bright side, Meta rallied 2.92% after the social media giant announced its new Threads app, and alternative to its rival Twitter.