Stock market indexes pared opening losses but remained lower Wednesday morning, as Fed Chairman Jerome Powell makes a report on monetary policy to Congress. Oil stocks continued to slide.
The Nasdaq composite fell more than 1% at the open but trimmed its loss to 0.1% at 10:04 a.m. ET. The S&P 500, weighed more heavily in energy stocks, also pared losses and was off 0.4%.
The Dow Jones Industrial Average fell 0.7%. Small caps performed even poorer, with the Russell 2000 off 1.1%.
Volume rose on the Nasdaq and fell on the NYSE compared with the same time on Tuesday.
Powell Says Rate Hikes ‘Meeting By Meeting’
Powell began his semiannual report to the Senate banking, housing and urban affairs committee about 9:45 a.m. ET. Powell said the Fed is looking for “compelling evidence” that inflation is coming down and will make rate decisions “meeting by meeting.”
U.S. Stock Market Today Overview
|Last Update: 10:16 AM ET 6/22/2022|
The Fed raised the fed funds rate by three-quarters of a percentage point last week, the largest hike since 1994. A similar increase is expected at the next Fed meeting, with an uncertain outlook on future rate increases.
Today, the yield on the 10-year Treasury note fell 14 basis points to 3.16%, as yields continue to trend lower. That’s the lowest 10-year yield since June 10.
The price of U.S. crude oil tumbled nearly 7% to $102.11 a barrel. That’s the lowest in nearly a month and extends a weeklong decline for oil futures.
President Biden will propose a three-month moratorium on the federal gasoline and diesel taxes, according to The Wall Street Journal. But the tax is 18.4 cents a gallon for gas and 24.4 cents for diesel, a small portion of the total price per gallon. The suspension would require congressional approval, and members of both parties have expressed reservations about Biden’s proposal.
Energy Sector Weakest In Stock Market
Energy Select Sector SPDR (XLE) fell more than 4%, the weakest S&P sector ETF this morning. The ETF plunged 17.2% last week on worries of a slowing global economy.
Marathon Oil (MRO) gapped down to a loss of 8% at the open, sinking to the lowest since April 25. Canada’s EnerPlus (ERF) gapped below its 50-day moving average in heavy volume. The oil and gas exploration company had already round tripped a 27% gain from its 14.69 buy point. A bounce off the 50-day line also is failing now.
Drilling services provider Halliburton (HAL) sold off more than 7% in early trading. A breakout past a 42.70 buy point in a cup base has failed already.
IBD 50 Falls More Than Stock Market
Innovator IBD 50 ETF (FFTY) fell 3.6%, a much larger loss than the major indexes. Fertilizer, shipping and energy stocks in the index fell 3% to 8%.
Earthstone Energy (ESTE) fell below the 50-day moving average in heavy volume, extending a sharp retracement.
Steel Dynamics (STLD) and Commercial Metals (CMC) fell below the 200-day moving average.
Privia Health Group (PRVA), Tuesday’s IBD 50 Stocks to Watch company, remained above the 29.07 buy point of a cup base. A handful of other medical stocks rose in the IBD 50.
The Shanghai Composite slid 1.2% and the Hong Kong Hang Seng sold off 2.6%, the largest loss since June 13. The Nikkei in Tokyo fell 0.4. In Europe, the DAX index in Germany was down more than 2% in afternoon trading. The Paris CAC 40 lost 1.8% and the London FTSE 100 was off 1.4%.
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