Buoyed by strong earnings from Apple Inc., the S&P 500 index rose higher at the open. Posting a daily high of 2825.83 led by technology and financial stocks, the index reversed gains as investors remained cautious ahead of the release of the FOMC (Federal Open Market Committee) statement.

Sentiment was further weakened by renewed trade tensions following news that the Trump administration plans to raise tariffs on $200 billion worth of Chinese goods to 25% from the previously announced 10%.

The index fell sharply in conjunction with the release of the FOMC statement, hitting a daily low of 2805.85 as the Federal Reserve signaled another rate hike was imminent. Paring some of the losses as investors digested the Fed announcement, the index closed session lows at 2813.36, down slightly 2.93 points and losing 0.10% from session close previous.

The energy sector led the declines on the day, losing 1.33% in today’s session. Oil prices remained volatile and closed lower after an EIA (Energy Information Administration) report indicated a surprise increase in crude production of 3.8 million barrels for the week, along with a decrease in production. Chesapeake Power Corporation. led the decline in the sector, losing 5.72% after reporting a decline in revenue as a result of a drop in oil and gas sales.

Renewed concern over the trade war affected trade-sensitive industrials, materials and consumer discretionary sectors. These sectors lost 1.28%, 0.97% and 0.44%, respectively, after the White House announced its plan to raise tariffs on $200 billion worth of Chinese goods to 25%. from the previously announced 10%. Hanesbrands Inc. was the worst performer in the index, falling 19.32% after reporting disappointing earnings.

Other notable losers were the utilities, consumer staples and telecommunications sectors, which fell 0.83%, 0.88% and 0.07%. On the other hand, gains in the Technology, Real Estate and Healthcare sectors, which capped the day’s losses, rose 0.97%, 0.70% and 0.05% respectively.

The broader financial sector closed the session unchanged, reversing the day’s gains after the release of the FOMC statement. The Federal Reserve left the interest rate unchanged but hinted at an imminent rate hike next month citing strong economic fundamentals. 10-year Treasury yields closed at 3.006%, crossing the psychologically important 3% mark for the first time since June.

Technology stocks continued their rally, rising 0.97%, as Apple Inc. surged to record highs, gaining 5.89% intraday and closing in on a $1 trillion milestone after the tech giant reported strong iPhone sales and higher guidance for the full year. The Real Estate and Health sector also closed higher, 0.70% and 0.05% respectively.

On the economic data front, private sector employment added 219,000 jobs in July compared to a forecast of 178,000 jobs. Meanwhile, the Institute for Supply Management ISM Manufacturing Index fell short of expectations at 58.1% in July vs. 59.5% expected. The drop was mainly due to the shortage of skilled labor and the higher cost of raw materials.

Leave a Reply

Your email address will not be published. Required fields are marked *