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S&P 500 Slips as Pre-Fed Jitters Keep Investors on Edge

Stock MarketsJun 14, 2021 03:25PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 slipped from near all-time highs Monday on worries that the Federal Reserve’s two-day meeting could usher in a talk of bond tapering in the wake of a sharp upturn in inflation.

The S&P 500 fell 0.22%, though remained close to its record high 4,249.97. The Dow Jones Industrial Average was down 0.63%, or 217 points, and the Nasdaq Composite was up 0.33%.

Investors could be in for a surprise on Wednesday when the Federal Open Market Committee, or FOMC, concludes its two-day meeting as investor bets that inflation is transitory may prove somewhat unfounded.

"Given the shift in the mix of inflation from transitory towards sustainable, the risk of a hawkish tilt within the FOMC has increased," Morgan Stanley (NYSE:MS) said in a note.

The fall in rates leading up to the FOMC meeting suggests investors are dismissing inflation as transitory, just "at the time when the sustainability of inflation looks more viable," Morgan Stanley added.  

Legendary investor Paul Tudor Jones said Monday that if the Fed doesn't acknowledge the recent jump in the pace of inflation, then that would be the "green light to go heavy on the inflation trade." Tudor touted gold, bitcoin and cash as his go-to inflation hedges.

Against the backdrop of these concerns somewhat that the Fed may tilt hawkish, Treasury yields climbed, but that didn't spell doom and gloom for highly-valued technology stocks, which tend to be less attractive in rising rate environments.  

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

Emerging growth stocks - that had came under pressure earlier this year over valuation concerns – including Peloton (NASDAQ:PTON), Zoom Video Communications (NASDAQ:ZM) and DocuSign (NASDAQ:DOCU) were mixed, with the latter up more than 2%.

Cyclicals including industrials, energy, and financials were not having a good day.

Financials slipped more than 1%, paced by a drop in banking stocks after JPMorgan's chief executive Jamie Dimon warned the that pandemic-led boom in trading revenue for JPMorgan could be nearing an end.

Fixed-income trading revenue JPMorgan will be just above $6 billion in the second quarter, Dimon said Monday at a Morgan Stanley virtual conference.

JPMorgan Chase & Co (NYSE:JPM), Citigroup (NYSE:C) and Goldman Sachs Group (NYSE:GS) were down more than 1%.

Energy, meanwhile, failed to capitalize on a jump in oil prices toward 32-month highs amid losses in Baker Hughes (NYSE:BKR), Schlumberger (NYSE:SLB) and Hess (NYSE:HES).

In other news, Lordstown Motors (NASDAQ:RIDE) fell 18% after Steve Burns and Julio Rodriguez resigned as the company's chief executive officer and chief financial officer, respectively.

S&P 500 Slips as Pre-Fed Jitters Keep Investors on Edge
 

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Comments (9)
Matt Kay
Matt Kay Jun 14, 2021 4:10PM ET
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On edge? Are you serious you don keys? Complacency has never been so high. Printer goes BRR and billionaires are getting richer by the minute while the rest of the country is being destroyed.
Muhammad Rasool
Muhammad Rasool Jun 14, 2021 4:07PM ET
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Muhammad rasool..$500
Mitchel Pioneer
Mitchel Pioneer Jun 14, 2021 4:03PM ET
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Another miracle "in late trade" for the biggest investment JOKE in the world, as the criminal fraud continues unchecked.
Theresa Scott
Theresa Scott Jun 14, 2021 3:47PM ET
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An economy built on currency devaluation and debt...a country that has been unable to achieve a balanced budget or surplus in 20+ years... a country that is in unprecedented levels of debt and has a regime in power now that has managed to propose more spending in its first 100 days than any other president during their entire term.
Rob Fordham
Rob Fordham Jun 14, 2021 3:46PM ET
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Why in the world do they keep thinking the fed is going to not do what they keep saying they are going to do
Elmer Fudd
Elmer Fudd Jun 14, 2021 3:46PM ET
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Politicians lie
Elmer Fudd
Elmer Fudd Jun 14, 2021 3:46PM ET
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Politicians lie
Ja Kub
Ja Kub Jun 14, 2021 3:37PM ET
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I think they will say.. mmm. We will keep printing. Why not. Nobody protests against that.
Jouni Matero
Jouni Matero Jun 14, 2021 3:37PM ET
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Brrrrrr...
Jouni Matero
Jouni Matero Jun 14, 2021 3:31PM ET
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Jitters, shrugg off, loom... Can't you come up with some new stuff for a while? You just copycat your few days old news, change few words and press publish button. Come on.
Cap Stone
Cap Stone Jun 14, 2021 3:25PM ET
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Same *****the last few month. The fed is going to say the same thing.
Zii Da
Zii Da Jun 14, 2021 1:56PM ET
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42097
 
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