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S&P 500 Off Lows as Bets on Mega Rate Hike Ease; Banks Glum on Earnings Miss

Stock Markets Jul 14, 2022 03:20PM ET
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By Yasin Ebrahim

Investing.com -- The S&P 500 cut losses Thursday, as Federal Reserve officials downplayed the prospect of a 1% rate hike, though disappointing quarterly results from major Wall Street banks fueled recession fears and soured investor sentiment.

The S&P 500 fell 0.3%, the Dow Jones Industrial Average fell 0.5%, or 164 points, the Nasdaq was down 0.03%. All three major averages were down more than 2% at the lows of the session. 

JPMorgan (NYSE:JPM) said it would temporarily pause share buybacks after reporting second-quarter earnings that fell short of estimates, sending its shares more than 3% lower.

The Wall Street bank also set aside more money than expected for potential loan losses, raising concerns about the strength of the U.S. consumer.

Morgan Stanley (NYSE:MS) also reported a miss on second-quarter earnings, driven by weaker performance in its investment banking business. Its shares recovered to trade flat after falling more than 2%.

Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C), which both report on Friday, were down 1% and 3%, respectively. 

Technology stocks turned positive as Treasury yields retreated after Federal Reserve governor Christopher Waller played down the prospect of the Fed rolling out an unprecedented 1% rate hike later this month.  

“You don't want to overdo rate hikes,” Waller said Thursday, adding that the market had got "ahead of themselves" on pricing a 100 basis point hike, though he didn’t rule out the prospect of a larger hike. 

“If that data come in materially stronger than expected it would make me lean towards a larger hike at the July meeting,” he added.

St. Louis Federal Reserve President James Bullard reportedly also said he would favor a 75 basis point hike at the July meeting.

The odds of a 1% rate hike fell to about 44% from 80% a day earlier, according to Investing.com’s Fed Rate Monitor Tool.

Taiwan Semiconductor Manufacturing (NYSE:TSM) gained 2% to help chip stocks erase losses after the chip bellwether reported quarterly results that beat on both the top and bottom lines.

The chipmaker also raised its full-year revenue forecast, helping to cool concerns somewhat about the chip demand outlook following Micron's gloomy outlook a few weeks ago.

Energy was also one of the major decliners as oil prices added to recent losses on concerns that a global recession will dent demand for energy.

APA (NASDAQ:APA), EOG Resources (NYSE:EOG), and Coterra Energy (NYSE:CTRA), each down more than 3%, led the move lower in energy.

In other news, Cisco (NASDAQ:CSCO) fell nearly 1% as JPMorgan downgraded the stock to neutral from outperform on worries that “supply and spending hesitations” will weigh on demand.

S&P 500 Off Lows as Bets on Mega Rate Hike Ease; Banks Glum on Earnings Miss
 

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Comments (12)
Kerry Ditto
Kerry Ditto Jul 14, 2022 4:24PM ET
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Walmart becomes more like old Kmart. Are Kmart stores still around somewhere?
Kerry Ditto
Kerry Ditto Jul 14, 2022 4:08PM ET
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Maybe Amazon should acquire Target and name it Amaget
Mitchel Pioneer
Mitchel Pioneer Jul 14, 2022 4:06PM ET
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"US Stocks Recover in Late Trade," the most prolific headline in internet news history.  Another miraculous reversal of losses.  The US stock market is a fraudulent, criminally manipulated farce.
First Last
First Last Jul 14, 2022 4:06PM ET
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And the market fell in late trade yesterday.  Stupid perma-bears expect the market to fall every minute.
First Last
First Last Jul 14, 2022 4:06PM ET
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And the market fell in late trade yesterday.  Only an idiot expects the market to fall every minute.
Kerry Ditto
Kerry Ditto Jul 14, 2022 4:04PM ET
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Rate hiking is a good thing for retirees depending on CDs and annuities investments. So, some rate hiking is long overdue anyway.
First Last
First Last Jul 14, 2022 4:04PM ET
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No good for them if they're already in long-term bonds and prices are rising against their fixed incomes.  Good for them that the Democrats in gov't have been raising the checks they get from the gov't.
Brad Albright
Brad Albright Jul 14, 2022 4:04PM ET
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True. A healthy 5% on a CD would be a good thing for a lot of people.
Kerry Ditto
Kerry Ditto Jul 14, 2022 3:27PM ET
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Maybe Walmart acquires Target and names it Walgetmart to dominate Amazon.
Brian Mars
Brian Mars Jul 14, 2022 3:27PM ET
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Its called Tarmart! Lol
Kerry Ditto
Kerry Ditto Jul 14, 2022 3:27PM ET
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Or maybe Tarmartzone
soho electronics
soho electronics Jul 14, 2022 3:26PM ET
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how does this happen everyday. this is pure manipulation. fed must be pumping markets. after hours drop they pick up stocks at a lower price then pump up market
James Hilsher
JCH007 Jul 14, 2022 3:26PM ET
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Market is definitely rigged.
First Last
First Last Jul 14, 2022 3:26PM ET
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Trolls are also rigged.
Stan Smith
Stan Smith Jul 14, 2022 3:25PM ET
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These articles always focus on the symptoms...Inflation isn't going away and will only get worse. Rate Hike easing should also be terrible news for stocks and Americans
First Last
First Last Jul 14, 2022 3:25PM ET
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Russian withdrawal will lead to inflation & rate hikes easing.  These articles here are financial articles and tend not to delve into military speculations.
Kerry Ditto
Kerry Ditto Jul 14, 2022 3:23PM ET
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Target is far better than Walmart in same day deliverty competition and website quality.
Jack Peterson
Jack Peterson Jul 14, 2022 3:23PM ET
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Feels like Deja Vu everyday… makes you wonder..
First Last
First Last Jul 14, 2022 3:23PM ET
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Situation in Ukraine hasn't changed much in a while.
Andrew Sim
Andrew Sim Jul 14, 2022 2:36PM ET
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bullish, futures rallied
 
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