Stocks Pull Back After Record Open As FOMC Rate Decision Looms

  • The S&P 500 fell back from an all-time high at the open, but closed higher.
  • It was a fairly subdued day for equity markets, and investors remained cautious ahead of the FOMC meeting on Wednesday.

It was a fairly quiet day in Wall Street. The S&P 500 it fell back from all-time high open levels (as did the other major indices), but still managed to close 0.1% gain (another all-time close). The Dow Jones fell 0.3% while the Nasdaq gained half a percent. Small-cap stocks were the worst performers, with the Russell 2000 slipping 1.7%. The CBOE Volatility Index (or VIX) fell to 19.79 (down from 0.24 on the day) and appears poised to break towards pre-pandemic levels in the teen lows.

In terms of the performance of the GICS sector, Energy was the worst, falling 2.8% in the session. The industrial and financial sectors were the next worst performers, falling 1.4% and 1.1%, respectively. Information Technology and Consumer Discretionary were the best performers, gaining 0.8% and 0.9% each.

Performance of the day

As noted, it was a very subdued day on Wall Street, and stocks apparently showed little concern amid weaker-than-expected US retail sales and industrial production data, both for the month of February. The weakness in the former is not expected to last long, given that US consumers are currently in the process of receiving another round of stimulus checks, this one worth $ 1,400, which should give a solid boost to retail spending in March. The weakness in the latter is a bit more worrisome and could be a reflection of some of the supply chain restrictions that were noted in recent months in global PMI and ISM surveys; This could be a drag on the US economy in the coming months.

A decent auction of 20-year US government bonds eased concerns about the market’s ability to absorb the issuance of US government debt with the Fed buying bonds at its current rate, resulting in a relief for the FOMC, which began its two-day meeting on Tuesday.

Otherwise, there weren’t many other fundamental news or catalysts for equity investors to take advantage of. Focus is firmly on Wednesday’s Fed event …

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