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S&P 500 Slips as Signs Bond Tapering May Enter Fed's Thinking Halts Rebound

Stock Markets May 19, 2021 02:47PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com –The S&P 500 fell Wednesday as signs the Federal Reserve is starting to think about broaching the bond tapering topic at upcoming meetings offset relative rebound in tech amid dip buying in chip stocks.  

The S&P 500 fell 0.81%, the Dow Jones Industrial Average fell 0.49%, or 341 points, and the Nasdaq Composite slipped 0.49%.

The Federal Reserve minutes from its April meeting due at 2PM ET, served up the first signs that some central bank members are ready to start thinking about tapering. 

"A number of participants suggested that if the economy continued to make rapid progress toward the Committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchase," the minutes showed.

Tech was flat after recovering from a more than 1% drop intraday as battered chip stocks attracted dip-buying helping to steady the overall sector.

The iShares PHLX Semiconductor ETF (NASDAQ:SOXX) was up more than 1%, led by Marvell Technology (NASDAQ:MRVL), II-VI (NASDAQ:IIVI) and Analog Devices (NASDAQ:ADI) leading the charge.

Analog Devices climbed more than 4% after reporting first-quarter results that topped analysts' estimates.

Mega-cap tech, meanwhile, also pared the bulk of their losses.

Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Microsoft (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) were well off their intraday lows.

The dip-buying in tech, however, appears to come at the expense of the economically-sensitive cyclicals corners of the market like energy, financials and materials.

Energy was among biggest losers on the day as oil prices fell more than 2% despite data showing a smaller-than-expected build in weekly U.S. crude stocks.

Crude oil stockpiles rose by 1.3 million barrels for the week to May 14, a lower build than the 1.6 million barrels economists had forecast.

On the earnings front, Take-Two Interactive Software (NASDAQ:TTWO) reported fiscal fourth-quarter results that topped Wall Street estimates, sending its share price up more than 5%.

Target (NYSE:TGT) was also up more than 5% after its first-quarter results beat on both the top and bottom lines.

In the midst of the selloff in crypto that has since abated - sparked by a regulatory crackdown on Bitcoin in China and broader risk-off sentiment in crypto markets during recent days - stocks including Tesla (NASDAQ:TSLA), Square and MicroStrategy were under pressure.

S&P 500 Slips as Signs Bond Tapering May Enter Fed's Thinking Halts Rebound
 

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Comments (13)
Jouni Matero
Jouni May 19, 2021 4:07PM ET
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What a joke market. Negative news or no negative news, market rises at light speed. "No manipulation" from FED, associated banks and hedge funds. Take the wealth from retail and share with rich. Well done, including tonite.
Church of Bear Market
Church of Bear Market May 19, 2021 4:07PM ET
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It’s the way of the world since ancient times.
Ross Dre
Ross Dre May 19, 2021 4:07PM ET
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It’s a huge joke.... “market starts buying chips becAuse they are SOOO undervalued right now.”
Church of Bear Market
Church of Bear Market May 19, 2021 4:05PM ET
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There be bears lurking in the forest and they will descend out in the open to feast on an inflated bubble.
Mitchel Pioneer
Mitchel Pioneer May 19, 2021 3:27PM ET
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200 points in losses miraculously vanish from the NASDAQ, while losses on the S&P and DOW are halved.  How many times to you see "rallies" halved by the close?  Only in the US Ponzi Scheme, greatest financial fraud in history, and biggest investment joke in the world.
William Bailey
William Bailey May 19, 2021 3:27PM ET
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Huge losses coming fast
Michael Davino
MichaelDavino May 19, 2021 3:23PM ET
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tomorrow the Dow will rally a thousand points as is the normal Delayed Reaction. In this market, no apocalyptic news is "Buy Buy Buy" news.
William Bailey
William Bailey May 19, 2021 3:23PM ET
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Credit bubble bursting and a vacuum coming
Miles Mathewson
Miles Mathewson May 19, 2021 3:10PM ET
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All the way down until November 21!!!!!
Vatsal Modi
Vatsal Modi May 19, 2021 2:50PM ET
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so is it gonna pull back market or not??
robin sfd
robindahoodisdum May 19, 2021 2:32PM ET
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That's funny because traders didn't buy the dip until 15 minutes ago when the SP was down roughly 1%. Timing of this article is inappropriate.
NYSE NASDAQ
NYSE NASDAQ May 19, 2021 2:18PM ET
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it is still not time to buy the dip, I am waiting atleast 10% drop from high. till then just watching.
Steffen vdm
Steffen vdm May 19, 2021 1:56PM ET
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At the moment I would only buy chips if it comes with fish. Oh, and a nice pint of beer
Adeel Jutt
Adeel Jutt May 19, 2021 1:55PM ET
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I want to it
 
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