With the Federal Reserve’s monetary policy announcement looming, stocks have moved mostly lower in morning trading on Wednesday. The tech-heavy Nasdaq has shown a notable move to the downside after ending the previous session slightly higher.
Currently, the major averages are all in negative territory, although the Dow is down just 27.14 points or 0.1 percent at 32,798.81. The Nasdaq is down 140.98 points or 1.1 percent at 13,330.59 and the S&P 500 is down 22.82 points or 0.6 percent at 3,939.89.
The weakness on Wall Street comes as traders express some uncertainty ahead of the Fed’s monetary policy announcement this afternoon.
The Fed is widely expected to maintain its ultra-easy money policy, but traders will be paying close attention to the central bank’s updated forecasts for the economy, inflation and interest rates.
Some traders are also hoping Fed Chair Jerome Powell will address the recent spike in treasury yields in his post-meeting press conference.
Treasury yields have shown a notable move to the upside ahead of the Fed announcement, contributing to the weakness in the technology sector.
The yields on ten-year notes and thirty-year bonds jumped to their highest intraday levels in over a year, raising concerns about the outlook for interest rates.
In U.S. economic news, the Commerce Department released a report showing a substantial decrease in new residential construction in the month of February.
The report said housing starts plummeted by 10.3 percent to an annual rate of 1.421 million in February after slumping by 5.1 percent to a revised rate of 1.584 million in January.
Economists had expected housing starts to decrease by 0.9 percent to a rate of 1.565 million from the 1.580 million originally reported for the previous month.
With the steep drop, housing starts continued to give back ground after reaching a fourteen-year high of 1.670 million in December.
The report also showed a much bigger than expected decrease in building permits, which plummeted by 10.8 percent to an annual rate of 1.682 million in February after spiking by 10.7 percent to a revised rate of 1.886 million in January.
Building permits, an indicator of future housing demand, had been expected to tumble by 7 percent to a rate of 1.750 million from the 1.881 million originally reported for the previous month.
Despite the weakness being shown by the broader markets, most of the major sectors are showing only modest moves on the day.
Oil, software and commercial real estate stocks are seeing some weakness in morning trading, although selling pressure has remained relatively subdued.
In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance on Wednesday ahead of the Fed announcement. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both ended the day nearly unchanged.
Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.
In the bond market, treasuries have climbed off their worst levels but remain firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.8 basis points at 1.659 percent.
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