NEW YORK, Sept 18 — Wall Street’s main indexes were subdued in choppy trading today as some megacap and chip stocks declined in the run-up to the Federal Reserve’s interest rate decision later this week.
Treasury yields edged higher on uncertainty around the US interest-rate trajectory through the year-end, pressuring some major growth names including Nvidia and Tesla, down 3.1 per cent and 3.8 per cent, respectively. Apple bucked the broader trend to rise 1.1 per cent.
UK-based chip designer Arm Holdings, which had a stellar debut on Thursday, dropped 6.1 per cent after Bernstein started covering the stock with an “underperform” rating.
A slump in chipmakers on concerns over weak demand and a slide in megacap growth stocks had driven the S&P 500, the Nasdaq and the Dow to their worst single-day fall on Friday since August 24, with the indexes losing between 0.8 per cent and 1.5 per cent.
A recent inflow of hotter-than-expected economic data has eased concerns about a potential recession, without raising fears of a September rate hike, though an uptick in crude prices threatens to keep inflation elevated, with oil prices firming today.
Stronger crude prices, however, made the energy sector a bright spot among major S&P 500 segments, up 0.5 per cent.
“Oil prices have entered into the narrative now and the Fed will consider this,” said Peter Andersen, founder of Andersen Capital Management.
“There will be a pause in September as indicated by the futures market. It is very important that we watch the upcoming CPI numbers and the employment numbers because they could have a strong impact on the way the Fed will wrap up the year.”
Traders largely expect the Fed to keep rates unchanged at 5.25 per cent to 5.5 per cent during its meeting on Wednesday, while their odds for another pause in November stand at 69 per cent, according to the CME FedWatch Tool.
Goldman Sachs, much like other big investors such as J.P. Morgan Asset Management and Janus Henderson Investors, anticipates the central bank to lift its economic growth projections this week. It also expects rates to have peaked.
At 9.46am ET, the Dow Jones Industrial Average was up 5.31 points, or 0.02 per cent, at 34,623.55, the S&P 500 was down 7.55 points, or 0.17 per cent, at 4,442.77, and the Nasdaq Composite was down 38.09 points, or 0.28 per cent, at 13,670.24.
Bucking the trend among its peers, chipmaker Micron Technology rose 0.7 per cent, following Friday’s rout, after Deutsche Bank upgraded its rating on the stock to “buy” from “hold”.
L3Harris Technologies rose 0.9 per cent after Wells Fargo upgraded the aerospace and defence firm to “overweight” from “equal-weight”.
Paypal Holdings lost 2 per cent after MoffettNathanson downgraded the digital payments firm to “market perform” from “outperform”.
Declining issues outnumbered advancers by a 1.73-to-1 ratio on the NYSE and by a 1.86-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and nine new lows, while the Nasdaq recorded 16 new highs and 99 new lows. — Reuters