Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 30, 2022. REUTERS/Brendan McDermid
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- US service sector index at 2-year low – ISM survey
- Rivian benefits as EV shipments grow
- Indexes: Dow down 0.33%, S&P down 0.14%%, Nasdaq unchanged
July 6 (Reuters) – U.S. stock indexes weathered mixed trade on Wednesday but were broadly unchanged ahead of the release of minutes from the Federal Reserve’s latest meeting, as investors awaited fresh clues about the central bank’s interest rate policy and fight against inflation.
After a brutal selloff in global equity markets in the first half of the year, nervous investors are keeping a close eye on central bank action as they try to gauge the impact of aggressive rate hikes on global growth.
With recent hawkish comments from Fed policymakers, most traders are seeing another hike of 75 basis points later in July.
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Trading on Wednesday was choppy, with all three major benchmarks having periods in both positive and negative territory. In the hour before the Fed minutes are due at 14:00 EDT (18:00 GMT), however, they held close to parity, with the Dow slightly lower.
Investors are focused on minutes from the Federal Open Market Committee’s June meeting, where it raised the key rate by three-quarters of a percentage point.
The conflict in Ukraine, decades-high inflation and the Fed’s shift away from easy money pushed the S&P 500 (.SPX) to its steepest first-half percentage drop since 1970. The benchmark index is down nearly 20% so far this year.
U.S. 10-year Treasury yields hit a session high after falling to a five-week low earlier in the day.
A key part of the yield curve inverted for the first time in three weeks on Tuesday, reflecting growing concern in the world’s largest bond market about recession risks.
“It’s a battle between people who believe the economy will stay strong enough and not go into a recession and those who believe we’re already in one,” said Art Hogan, chief market strategist at B. Riley.
A survey by the Institute for Supply Management showed the U.S. services industry slowed less than expected in June, but a measure of services employment fell to a two-year low, suggesting labor demand may be slowing. Read more
Another report showed that U.S. job vacancies fell less than expected in May, pointing to a still-tight labor market. The more comprehensive nonfarm payrolls report for June will be released on Friday. Read more
Oil prices have fallen in recent days as growing fears of demand destruction from a possible global recession outweighed supply concerns. The S&P 500 energy index (.SPNY) fell 2.9%, leading the decline among the 11 subsectors.
By 1:30 p.m. EDT, the Dow Jones Industrial Average (.DJI) fell 103.08 points, or 0.33%, to 30,864.74, the S&P 500 (.SPX) lost 5.18 points, or 0.14%, to 3,826.21 and the Nasdaq Composite (.IXIC) was flat at 11,321.69.
Uber Technologies Inc (UBER.N) and DoorDash Inc (DASH.N) fell 3.6% and 7.1% respectively after Amazon.com Inc (AMZN.O) agreed to take a 2% stake in Just Eat Takeaway.com’s ( TKWY .AS ) struggling U.S. food delivery business Grubhub. Read more
Rivian Automotive Inc ( RIVN.O ) gained 11.8 percent after the electric vehicle maker’s shipments nearly quadrupled as it ramped up production. Read more
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Reporting by Amruta Khandekar and Bansari Mayur Kamdar in Bengaluru and David French in New York Editing by Shunak Dasgupta and Matthew Lewis
Our standards: The Thomson Reuters Trust Principles.
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