The Dow Jones Industrial Average traded down more than 350 points after the Fed published at 2 pm ET. Major indicators have made substantial losses in the close, but still closed low in the end.
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Towards the end, the Dow Jones Industrial Average fell about 0.4% from about 1% previously. Tech stocks led the fall. The Nasdaq was down 2.2% on Wednesday.
The S&P 500 fell 1% while Russell 2000 lost 1.3%. Nasdaq and NYSE were trading higher on Wednesday at the same time. The benchmark 10-year Treasury note yield rose 2.6%. Meanwhile, West Texas Intermediate crude fell 4.7% to $ 97.11 a barrel.
Fed minutes rate increases, balance-sheets decrease
The newly released Fed Minutes shows that officials discussed at their March meeting how they would like to reduce their trillion bond holdings to an agreement of about $ 95 billion per month. Officials have agreed that the $ 60 billion and $ 35 billion mortgage-backed securities limit in the Treasury will be reduced from the balance sheet and will be paid in phases within three months.
At its March meeting, the Fed approved the first interest rate hike in more than three years.
US Stock Market Today Overview |
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|---|---|---|---|---|
| Indicator | Symbol | Price | Profit loss | % Change |
| Dow Jones | (0DJIA) | 34497.23 | -143.95 | -0.42 |
| S&P 500 | (0S & P5) | 4481.26 | -43.86 | -0.97 |
| Nasdaq | (0NDQC) | 13888.82 | -315.35 | -2.22 |
| Russell 2000 | (IWM) | 200.22 | -2.77 | -1.36 |
| IBD50 | (FFTY) | 36.70 | -1.08 | -2.86 |
Last Updated: 4:16 PM ET 4/6/2022 |
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The first interest rate increased by a quarter percentage point, or 25 basis points, raising the benchmark short-term debt rate. This rate has been close to zero since March 2020 at the beginning of the coronavirus epidemic.
“Many participants noted that – above the committee’s objectives, inflation is high, the risk of inflation, and the federal funds rate is below its long-term level participants’ estimates – they would prefer a 50-basis-point increase. However, uncertainty over the war in Ukraine prevented some officials from taking the 50-point step.
Dow Jones today
Among the Dow Jones leaders, the technology giants Microsoft (MSFT) and Salesforce.com (CRM) dragged on with a loss of over 3.5%. Salesforce.com did the worst with its 4.4% loss. On the contrary, healthcare stocks United Health (UNH) and Amazon (AMGN) led with profits of more than 2% each.
Microsoft, meanwhile, is nearing its 50-day moving average test, which is below the 300 level. Meanwhile, peer tech stocks Apples (AAPL) lost more than 1.8% on Wednesday. Apple stock has held up much better than other technology stocks in recent pullbacks. Shares have just a 6% discount from the high and are testing support at the 21-day line. 176.65 by points are still in play.
The S&P 500 sector has mixed transactions. On the downside, consumer discretionary and technology stocks have lost 2% or more. Utilities, real estate and healthcare – all defense sectors – led the way with gains of more than 1%.
The indices rose significantly from their lows in early March, when the new uptrend began. However, after last week’s pullback, the indices have been down this week. Nasdaq, which has never regained its 200-day line, split below its 21-day line on Wednesday and traded near session low. Meanwhile, the S&P 500 has fallen below its 200-day and 21-day lines, while the Dow Jones is below that average and is testing support at its 50-day line.
Increased stock to watch
Innovator IBD 50 ETF (FFTY) showed a 2.7% loss on Wednesday, after falling more than 3% on Tuesday, hitting growth stocks. The index finally broke below the support at the 50-day line after finally recovering this area in mid-March.
Within the Marketsmith Growth 250, coal stocks performed well in the beginning but were very high in the afternoon trade. Arch resources (ARCH) is testing support at its 10-week moving average. This is the first test of the line after the breakout.
Warrior Met Coal (HCC) is testing its 10-week line for the first time since the breakout. A bounce with the 10-week line closing suffix will place both stocks in the follow-on buy zone, extending up to 10% of their 10-week line.
