Stock Market News Today, 6/21/23 – Indices Close Lower as Tech Leads Selloff

Last Updated 4:01 PM EST

Stock indices finished today’s trading session in the red. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 1.35%, 0.52%, and 0.3%, respectively.

The technology sector (XLK) was the session’s laggard, as it fell 1.48%. Conversely, the energy sector (XLE) was the session’s leader, with a gain of 0.84%.

Furthermore, the U.S. 10-Year Treasury yield saw little change as it continues to hover around 3.73%. Meanwhile, the Two-Year Treasury yield saw a slight jump to 4.71%. This brings the spread between them to -98 basis points.

Compared to yesterday, the market is pricing in a higher chance of a higher Fed Funds rate for December 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% decreased to 33.6% compared to yesterday’s expectations of 35%.

In addition, the market is now also assigning an 11.2% probability to a range of 5.5% to 5.75%. For reference, investors had assigned an 8.4% chance yesterday.

Last updated: 2:30PM EST

Stock indices are mixed as we head into the final 90 minutes of today’s trading after Powell said earlier today that further interest rates will likely be needed. However, DataTrek’s recent investor sentiment survey paints a hopeful picture for U.S. equities and tech firms in the second half of 2023. It indicates a strong preference for big-name tech stocks like Microsoft, predicting the Federal Reserve will keep interest rates steady alongside stable Treasury yields. The survey also suggests that investors may be preparing to move funds from bonds to stocks in the latter half of the year.

Key takeaways from the study show an optimistic view of the S&P 500, with over a third of respondents expecting it to stay within 5% of current levels by year-end. Large-cap tech stocks seem to be the sector of choice, with Microsoft leading the way. Interestingly, investors are split on whether a new bull market is on the horizon, with 45% seeing a long-term bull market unfolding. In addition, the majority of participants foresee no economic recession for the second half of the year.

Last updated: 12:00PM EST

Indices are in the red at the time of writing, with growth stocks leading the decline. In his prepared opening speech, Powell shared that almost all officials anticipate a need for more interest rate hikes before the year’s end. However, as he answered questions from Congress members, he suggested the Fed might consider a less aggressive pace for these rate increases in the future.

Powell’s initial statement underscored the monetary policy committee’s cautious approach to maintaining steady interest rates at their last meeting. This cautious stance provides room for policymakers to weigh up new information and its impact on monetary policy. Expanding on the Fed’s latest decision, Powell clarified during his testimony that how high the rates rise is a different matter from how quickly the changes occur.

Last updated: 9:30AM EST

Stocks opened lower on Wednesday as Federal Reserve Chairman Jerome Powell indicated that investors should expect more interest rate hikes as “inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.” Powell stated this in his prepared remarks ahead of his testimony in front of the House Financial Services Committee.

The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.25%, 0.33%, and 0.4%, respectively, at 9:30 a.m. EST, June 21.

First published: 4:34AM EST

U.S. Futures are down this morning, as traders try to find direction after witnessing continuous high streaks in the last few trading sessions. The three major indices finished the trading session in the red on Tuesday after a long holiday weekend, putting a pause on the rally. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down 0.18%, 0.10%, and 0.06%, respectively, at 4:00 a.m. EST, June 21.

Markets worldwide will focus on Fed Chair Jerome Powell’s testimony in front of the House Financial Services Committee scheduled for 10:00 a.m., EST, today. If Powell’s speech carries a hawkish tone, it may stir a sell-off in the market, even though he already warned the markets last week to expect two more interest rate hikes in the future.

In the meantime, shares of FedEx (NYSE:FDX) plunged in after-hours trading yesterday, after the company posted mixed Q4FY23 results. Also, shares of Chinese e-commerce giant Alibaba Group (NYSE:BABA) lost 4.5% yesterday, following the announcement of CEO succession in a surprise move. BABA’s unexpected move also dragged down the stocks of other Chinese players amid macro worries.

Elsewhere, U.K.’s core inflation jumped to 7.1% annually in May, its highest level since 1992. The latest consumer price index (CPI) figures have added greater pressure to Bank of England (BOE) officials while they prepare for another 25 basis point rate hike announcement tomorrow, June 22, in BOE’s thirteenth consecutive increase. 

European indices are trading mixed today, following the U.K.’s hotter-than-expected inflation figures. Britain’s annual headline CPI came in at 8.7% in May, unchanged from April. Also, the 0.6% monthly figure remains unchanged.

Asia-Pacific Markets End Mostly in Red

Most Asia-Pacific indices finished in the red today. Mainland Chinese and Hong Kong indices ended lower, dragged down by tech stocks.

Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices ended the trading session down by 1.98%, 1.31%, and 2.18%, respectively.

Meanwhile, Japanese stocks bucked the trend and continued their momentum. Japan’s Nikkei and Topix indices ended up by 0.56% and 0.49%, respectively.

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