Wall Street closed mixed on Wednesday after a choppy session. Market participants remained highly concerned about the intensified war between the United States and Iran. However, artificial intelligence (AI) trade regained some of its lost ground. The Dow fell sharply. The S&P 500 fell moderately while the Nasdaq Composite ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) shed 1.1% or 576.76 points to close at 52,348.39. Notably, 24 components of the 30-stock index ended in negative territory and six ended in the green. At the intraday low, the blue-chip index was down more than 855 points.
The tech-heavy Nasdaq Composite finished at 25,870.65, rising 0.2% on strong performance by AI giants. At the intraday low, the tech-laden index was down more than 292 points. The S&P 500 lost 0.3% to finish at 7,482.71. However, six out of 11 sectors of the broad-market index ended in positive territory while five finished in negative territory.
The Health Care Select Sector SPDR (XLV), the Energy Select Sector SPDR (XLE) and the Real Estate Select Sector SPDR (XLRE) rose 1.5%, 2.8% and 1.4%, respectively. On the other hand, the Information Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) fell 2.4% and 1.7%, respectively.
The fear gauge CBOE Volatility Index (VIX) rose 4.8% to 16.90. A total of 17.8 billion shares were traded on Wednesday, lower than the last 20-session average of 23 billion. Decliners outnumbered advancers on the NYSE by a 3.5-to-1 ratio. On the Nasdaq, a 1.01-to-1 ratio favored advancing issues.
Middle East War Intensifies
The Middle East war intensified after President Donald Trump said that the ceasefire with Iran is over at the NATO summit in Turkey. Moreover, in a meeting with Ukrainian President Volodymyr Zelenskyy yesterday, President Trump said the United States would “very probably” attack Iran “hard again.”
Following these developments, prices of crude oil spiked. The U.S. benchmark — the West Texas Intermediate futures — rose 4.4% to settle at $73.52 per barrel. The global benchmark — the Brent crude futures — increased 5.4% to settle at $78.19 per barrel.
As a result, stock prices of giant crude oil companies ConocoPhillips COP and Marathon Petroleum Corp. MPC advanced 2.1% and 5.4%, respectively. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fed FOMC Minutes
The minutes of the Fed’s June FOMC meeting revealed that the Fed officials were divided about the future trajectory of the interest rate movement. Both sides have expressed their arguments in favor of a rate hike or cut. In this situation, the movement of the inflation rate is likely to be the key determinant of the central bank’s interest rate decision in the future.
Economic Data
For the week ended July 3, the U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3 million barrels from the previous week.
The U.S. Census Bureau reported that the wholesale inventories were up 0.1% in May. The metric for April was revised upward to 0.7% from 0.6% reported earlier.
The Federal Reserve reported that consumer credit fell by $0.2 billion in May, in contrast to the Zacks Consensus Estimate of an increase of $16.6 billion. The metric for April was revised marginally upward to $20.8 billion from $20.7 billion reported earlier.
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