Major stock indexes closed lower on Wednesday following disappointing data on China’s services sector expansion and the release of minutes from the Federal Reserve’s June meeting. The Fed’s minutes revealed that committee members still believed in maintaining a restrictive stance on monetary policy to achieve their objectives, with some members even favoring a rate increase last month.
Chinese stocks experienced a retreat, with Hong Kong’s Hang Seng Index losing 1.6% and the Shanghai Composite Index falling 0.7%, ending a three-day winning streak. This decline in China’s services sector expansion has global implications, as China plays a critical role in global growth, according to Hani Redha, a multiasset portfolio manager at PineBridge Investments.
In the US, major stock indexes also saw a decline. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all edged downward. The Dow industrials lost 0.4%, breaking a three-day streak of gains.
However, there were some positive performers in the market. AstraZeneca and Moderna saw gains, with AstraZeneca bouncing back after mixed results from a cancer drug trial caused a selloff earlier in the week. Moderna also advanced after reports of a deal to work towards drug production in China.
Shares of Meta, the social media giant, jumped approximately 3% ahead of the expected launch of its Twitter competitor on Thursday. JetBlue Airways also saw a fourth-straight daily increase, rising over 3%. The U.S. Global Jets ETF, which tracks several airline stocks, reached its highest close since April 2022.
In terms of commodities, copper prices weakened by 0.7% due to its heavy reliance on Chinese demand. On the other hand, oil prices rose, with the U.S. crude benchmark increasing by about 3%.
Treasury bonds experienced a rise, with the yield on the benchmark 10-year Treasury note moving up to 3.943%, compared to its close at 3.856% on Monday.
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What were the market implications of the Federal Reserve’s restrictive stance on monetary policy as revealed in their minutes from the June meeting
Major stock indexes closed lower on Wednesday following disappointing data on China’s services sector expansion and the release of minutes from the Federal Reserve’s June meeting. The Fed’s minutes revealed that committee members still believed in maintaining a restrictive stance on monetary policy to achieve their objectives, with some members even favoring a rate increase last month.
Chinese stocks experienced a retreat, with Hong Kong’s Hang Seng Index losing 1.6% and the Shanghai Composite Index falling 0.7%, ending a three-day winning streak. This decline in China’s services sector expansion has global implications, as China plays a critical role in global growth, according to Hani Redha, a multiasset portfolio manager at PineBridge Investments.
In the US, major stock indexes also saw a decline. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all edged downward. The Dow industrials lost 0.4%, breaking a three-day streak of gains.
However, there were some positive performers in the market. AstraZeneca and Moderna saw gains, with AstraZeneca bouncing back after mixed results from a cancer drug trial caused a selloff earlier in the week. Moderna also advanced after reports of a deal to work towards drug production in China.
Shares of Meta, the social media giant, jumped approximately 3% ahead of the expected launch of its Twitter competitor on Thursday. JetBlue Airways also saw a fourth-straight daily increase, rising over 3%. The U.S. Global Jets ETF, which tracks several airline stocks, reached its highest close since April 2022.
In terms of commodities, copper prices weakened by 0.7% due to its heavy reliance on Chinese demand. On the other hand, oil prices rose, with the U.S. crude benchmark increasing by about 3%.
Treasury bonds experienced a rise, with the yield on the benchmark 10-year Treasury note moving up to 3.943%, compared to its close at 3.856% on Monday.
To stay informed about market trends, readers can subscribe to free morning and evening newsletters that are delivered every weekday.
The poor China services sector data coupled with concerns over the Fed meeting minutes have triggered a decline in the stock market. It will be interesting to see how these factors impact the global economy and investor sentiments moving forward.