After a promising start to July, the stock market hesitated Wednesday morning as investors faced another set of signals from the Federal Reserve.
Indexes are moving from gains to losses. The S&P 500, Nasdaq and Dow Jones Industrial Average fell 0.1%. The Nasdaq is testing resistance at the 21-day exponential moving average. Small caps lagged, with the Russell 2000 down 0.5%.
Volume rose on the NYSE and Nasdaq compared with the same time on Tuesday.
Indexes made bullish action Friday and Tuesday, erasing big losses to close higher or near session highs. For now, the stock market is holding above the June lows, with its uptrend facing pressure.
Stock Market Waits For Fed Minutes
Minutes of the Fed’s June meeting are due to be released at 2 p.m. ET. The Fed has made it clear it will continue raising rates to fight inflation, even if it risks a recession. Bond futures trading tracked by the CME’s FedWatch shows more than an 80% chance of a 75-point rate hike at this month’s meeting.
U.S. Stock Market Today Overview
|Last Update: 10:10 AM ET 7/6/2022|
The yield on the 10-year Treasury note continued to drop, down 4 basis points to 2.77%. In a four-day period ending Tuesday, the benchmark yield tumbled nearly 40 basis points. That’s the steepest four-day decline since March 2020, when the Covid crisis rattled financial markets and started a brief bear market.
The price of U.S. crude oil fell 3% to $96.50 a barrel.
DoorDash (DASH) fell 9% and Uber (UBER) nearly 4% after Amazon.com (AMZN) added Grubhub to its suite of Prime services. Under a deal with Grubhub’s parent, Netherlands-based Just Eat Takeaway.com, Amazon also gains the right to acquire a stake in the food-ordering service.
Amazon shares fell 1% in early trading. Just Eat Takeaway.com said it continues to look to sell part or all of Grubhub.
IBD 50 Breaks Out Past Buy Point
Innovator IBD 50 ETF (FFTY) rose 0.3%, in line with the stock market indexes. Evolent Health (EVH) broke out above a 33.24 buy point in heavy volume. The buy zone goes to 34.90.
Evolent agreed to acquire IPG, a provider of surgical management technology for musculoskeletal conditions, from an equity platform of alternative asset firm TPG. The deal is worth $375 million plus a contingent consideration of up to $87 million. Evolent, which makes software to help the financial management of medical practices, was profiled in IBD 50 Stocks to Watch on June 22.
Dollar Tree (DLTR) scratched the 166.45 buy point of an oddly shaped cup-with-handle base but is trading slightly below the entry. Volume is flat so far.
Outside the IBD 50, Resolute Forest Products (RFP) shot up 65% after the Canadian paper and lumber products maker agreed to a buyout valued at $2.7 billion. The Paper Excellence Group is buying Resolute through its Domtar subsidiary for $20.50 a share, a 64% premium to Resolute’s closing price on Tuesday. The deal is expected to close in the first half of 2023.
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