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S&P 500 Dips, Nasdaq Ekes Out Record; Hawkish Fed Talk Continues

Stock MarketsJun 23, 2021 04:55PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed lower, while the Nasdaq notched a record high Wednesday as a surge in Tesla offset struggles in megacap tech amid an uptick in U.S. bond yields.  

The Nasdaq Composite closed up 0.13% at a closing high of 14,271.7, the S&P 500 fell 0.11%, and the Dow Jones Industrial Average slipped 0.21%, or 71 points.

Tesla (NASDAQ:TSLA) jumped 5% to offset weakness in the Fab 5 tech stocks.    

Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Google-parent Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) ended lower, while Facebook (NASDAQ:FB) was higher. 

Atlanta Fed President Raphael Bostic confirmed he was one of the seven Federal Open Market Committee members who projected a rate hike in late 2022 reflecting the June summary of economic projections released last week.

Bostic said the economy is close to meeting the Fed's "substantial further progress" hurdle to start bond tapering.

The recent bid in tech has been helped by investor bets that a low growth, stable inflation environment is on the horizon. But some warn it is too early to give up on the reflation rate, which tends to benefit economically cyclical corners of the market, as rates are likely to resume their upward projection.

"[W]e believe the U.S. is most likely still within the early-to-mid-stages of a reflationary recovery cycle that can transition toward inflationary growth in the years ahead," said Mark Luschini, chief investment strategy at Janney Montgomery Scott.

"[T]his reversion back toward low-rate/low-growth can persist over the near-term, [but] rates will eventually resume their modest upward trajectory … this can allow for further multiple expansion in stocks," it added.

Energy led the move higher propped up by rising oil prices as data showed weekly U.S. oil fell sharply for a fifth straight week, reflecting strong demand over the summer months.

Crude oil inventories fell 7.6 million barrels last week, compared with analysts' expectations for a draw of 3.9 million barrels.

The advance in U.S. rates helped financials, mostly banking stocks, which tend to benefit from rising rate environments amid a boost to net interest margin.

In vaccine news, the Centers for Disease Control and Prevention said there was a "likely association" between heart inflammation and mRNA vaccines in teenagers and young adults. Both Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) fell, with the latter down 4%. 

On the economic front, the frantic pace of housing activity appears to be cooling, constrained by supply issues as new-home sales fell by 5.9% to a 769,000 units in May on an annualized basis.

Bitcoin rebounded from its slump below $30,000 a day earlier, helping crypto-related stocks including Coinbase Global (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA), and Riot Blockchain (NASDAQ:RIOT) end the day higher. 

S&P 500 Dips, Nasdaq Ekes Out Record; Hawkish Fed Talk Continues
 

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Comments (11)
Wat The
WhatThe Jun 23, 2021 9:40PM ET
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We need a 20% correction to bring this back to acceptable levels!!!
arthur santos
arthur santos Jun 23, 2021 9:08PM ET
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the unruly children in the Fed house are sowing too much uncertainty. Hasn't daddy spoken already? Enough!
Joel Schwartz
Joel Schwartz Jun 23, 2021 8:34PM ET
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If inflation is “transitory” according to the FED, so are these bubble markets.
Jouni Matero
Jouni Matero Jun 23, 2021 8:34PM ET
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Just to be bear now you have to have big pockets and be ready to see transitory massive losses, it'll come back when house of cards collapses and it will.
Jokers R Us
Jokers R Us Jun 23, 2021 6:50PM ET
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Fed wants to have the same effect on markets without actually doing anything because they can’t. Hopefully someday markets call their bluff.
Sean Livingstone
Sean Livingstone Jun 23, 2021 6:44PM ET
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Most of you who are mad on this rising market cos you miss the ride or you shorted the market? Lol.. You need to read the ticker better.
Rob Fordham
Rob Fordham Jun 23, 2021 6:44PM ET
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Yep if they had made money on the run up they would not be so indignant just saying
Jouni Matero
Jouni Matero Jun 23, 2021 6:44PM ET
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And same goes with people who made gains on this rising market, you guys are over optimistic it only goes up forever. But perhaps you guys are right, it's easy market when everybody plays up.
Luis Campagna
Luis Campagna Jun 23, 2021 6:03PM ET
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stable inflation horizon , that has to be a joke
Tyrone Jackson
Tyrone Jackson Jun 23, 2021 6:01PM ET
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The 10 million people that lost their jobs are not back to work yet. And the want to raise rates Lmao They talk and billions move. But the are talking about raising rates IN OVER 2 years lol.
Darryl Allen
Darryl Allen Jun 23, 2021 6:01PM ET
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there are like 9 million job openings
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jun 23, 2021 5:54PM ET
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“Hawkish” is billions in mortgage backed securities and bonds being purchased each month?
Ben Chod
Ben Chod Jun 23, 2021 5:22PM ET
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We played a game when we were younger. Yes means no and no means yes. Fed are playing a game where docish means hawkish and hawkish means dovish
Elmer Fudd
Elmer Fudd Jun 23, 2021 4:34PM ET
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So we're close to meeting the requirements for tapering but bullish since it's not official yet
Mitchel Pioneer
Mitchel Pioneer Jun 23, 2021 4:27PM ET
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More record levels of fraud and criminal manipulation in the US Ponzi Scheme.
Jokers R Us
Jokers R Us Jun 23, 2021 4:27PM ET
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All countries are tied to the US therefore all the rest are ponzi schemes too. Germany is negative interest rates. Stop being biased.
Joel Schwartz
Joel Schwartz Jun 23, 2021 4:27PM ET
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Jokers R Us Negative rates should be illegal. They don’t even make sense.
 
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