Wall Street’s main indexes slipped on Wednesday as investors awaited minutes of the Federal Reserve’s June meeting for clues on the central bank’s monetary policy path, while Sino-U.S. tensions and weak economic data from Beijing dented sentiment.
Investors are focused on the Fed minutes, expected to be released around 2 p.m. ET, as they resume trading after the July 4 Independence Day holiday.
Bets for a 25-basis-point rate hike in July stood at 83%, while traders have priced in a 32% chance the U.S. central bank would deliver another hike by October, according to Refinitiv data.
“There is going to be a little bit of dissension among the ranks and the overall tone will be let’s see how this plays out,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“Stocks have accounted for another 25 basis point rate hike when the Fed meets later this month, but a lot of people are divided on whether or not there’s going to be another rate hike (after July).”
Nine of the 11 major S&P 500 sectors fell in early trading with material shares leading declines, down 1.7%, while financials lost 0.9%.
Traders also await U.S. factory orders data, due at 10 a.m. ET, to gauge the impact of higher rates on the economy after a survey showed on Monday manufacturing slumped in June.
Wall St rallies; Nasdaq hits 40-year milestone
More economic data, including the non-farm payrolls report on Friday, is scheduled for release later this week.
Chip stocks such as Nvidia and Micron Technology fell 0.7% and 1.0%, respectively, after China said it would control exports of some metals widely used in the semiconductor industry as tensions between Beijing and Washington rise over access to high-tech microchips.
The Philadelphia SE Semiconductor Index lost 0.9%.
Shares of Wolfspeed gained 12.8% after the company signed a 10-year silicon carbide wafer supply agreement with Renesas Electronics Corp.
U.S. main indexes kicked off the third quarter with slim gains in a holiday-shortened session on Monday, led by Tesla after the electric-vehicle company posted record second-quarter deliveries.
At 9:48 a.m. ET, the Dow Jones Industrial Average was down 147.62 points, or 0.43%, at 34,270.85, the S&P 500 was down 11.10 points, or 0.25%, at 4,444.49, and the Nasdaq Composite was down 6.07 points, or 0.04%, at 13,810.71.
China’s June services activity expanded at the slowest pace in five months, raising concerns about global economic recovery, a private-sector survey showed.
Among other movers, Netflix gained 1.8% as Goldman Sachs raised its rating and price target.
United Parcel Service slid 2.1% after the Teamsters Union and the postal service operator accused each other of walking away from negotiations.
Moderna rose 4.4% after the drugmaker signed an agreement to work towards opportunities to research, develop and manufacture mRNA medicines in China.
Declining issues outnumbered advancers by a 3.73-to-1 ratio on the NYSE and a 2.24-to-1 ratio on the Nasdaq.
The S&P index recorded 6 new 52-week highs and one new low, while the Nasdaq recorded 23 new highs and 21 new lows.