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Stock Market Today: Dow Slides as Fears of Big Fed Hike Run High Ahead of Decision

Stock Markets Jun 14, 2022 04:10PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The Dow fell Tuesday as an early-day show of strength quickly faded as investors braced for a hawkish surprise from the Federal Reserve following recent signs that elevated inflation will stick around for longer than many had expected.    

The Dow Jones Industrial Average slipped 0.5%, or 151 points, the Nasdaq was up 0.2%, and the S&P 500 fell 0.4%

The Federal Reserve kicked off its two-day meeting on Tuesday. But ahead of the central bank’s rate decision on Wednesday, there have been a late flurry of bets on the Fed delivering a 0.75% rate hike rather than the 0.5% expected.

About 94% of the traders expect the Fed to deliver 0.75% hike on Wednesday, a sharp increase from the 6.9% seen in the prior week, according to Investing.com’s Fed Rate Monitor Tool. The repricing of Fed hikes follows Friday's hotter than expected inflation report.  

Technology stocks attempted to pare some of its losses from a day earlier, but dip-buying action was limited by rising Treasury yields ahead of the Fed decision. The United States 10-Year yield topped 3.45%, a fresh 11-year high.

Big tech, excluding Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN), traded modestly higher, with Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) up less than 1%.

Oracle (NYSE:ORCL) helped boost sentiment on tech stocks after reporting quarterly results that topped estimates, while guidance touted stronger demand for enterprise software spending.

The full-year guidance “suggests continued strength this coming year—with total cloud revenue expected to grow >30% organically and cloud license and support expected to see growth accelerating and 'could see' double-digit organic growth,” Credit Suisse said in a note.

Twitter (NYSE:TWTR) also bucked the trend lower as reports that Elon Musk will attend an employees' all-hands meeting later this week boosted hopes that the billionaire will follow through on his $44 billion deal to take the social media giant private.

Energy, which was the biggest decliner a day earlier, cut gains to close the day flat after oil prices took a u-turn on reports that President Joe Biden is set to meet with Saudi Crown Prince Mohammed bin Salman.

The meeting fueled hopes that the talks could result in OPEC and its allies to release more barrels of oil to bring some relief to Americans faced with pain at the pump as gas prices top $5 a gallon or more.    

Defensive sectors of the market including consumer staples and utilities, which often serve as bond proxies, were the biggest decliners on the day under pressure from rising Treasury yields.

Clorox Co (NYSE:CLX) and Procter & Gamble (NYSE:PG) fell more than 3%, while American Water Works (NYSE:AWK) and Pinnacle West Capital Corp (NYSE:PNW) were down more than 5% and 4%, respectively.

Crypto-related stocks show little sign of staging a comeback after Coinbase (NASDAQ:COIN) saying it would slash 18% of its workforce flagged worries of a recession and crypto winter amid a rout in cryptocurrencies including Bitcoin.

In other news, FedEx Corporation (NYSE:FDX) jumped more than 14% after raising its dividend by more than 50%.  

Stock Market Today: Dow Slides as Fears of Big Fed Hike Run High Ahead of Decision
 

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Comments (12)
Iraklis Osaze
Iraklis Osaze Jun 16, 2022 9:16AM ET
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poop
Michael Paulsen
Michael Paulsen Jun 14, 2022 7:56PM ET
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Tomorrow will be a huge rally. The fed will raise rates .5.
Iraklis Osaze
Iraklis Osaze Jun 14, 2022 7:56PM ET
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how do you feel about not having customers and crypt
Mark Manley
Mark Manley Jun 14, 2022 7:34PM ET
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Censored one again for pointing out that Biden has caused the S&P to lose 1100 points in just over a year
Mark Manley
Mark Manley Jun 14, 2022 7:33PM ET
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Nice job FJB, you've managed to shave 1100 points off the S&P in just over a year. Your comments about the economy doing great are nothing short of delusional
Casino Crypt
CasinoCrypt Jun 14, 2022 7:31PM ET
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The markets have had their heads in a cloud for the last decade addicted to free money. Now applying binary logic to something that is as messy as an economic oil slick the size that we have never seen before. The FED are powerless and damage is already done . Your average stock valuation needs to come down 70% to reflect against the true 40 year data that is being presented.
John Lenkiewicz
John Lenkiewicz Jun 14, 2022 6:16PM ET
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Sounds like .75 is an attempt to create false expectations so a .50 increase will spark a rally.  Is there any honest financial journalism left in the mainstream media???
Gary Moses
Gary Moses Jun 14, 2022 6:16PM ET
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Absolutely NOT.
Matthew Goff
Matthew Goff Jun 14, 2022 5:34PM ET
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The whole mess that's been created was intentional and they make false narratives. Mid term elections has Never been so important.
Steve Peters
Steve Peters Jun 14, 2022 5:34PM ET
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Spot-on! Vote out the loons that created this mess.
Gary Moses
Gary Moses Jun 14, 2022 5:34PM ET
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Our economy is in such a MESS. I DONT EVEN THINK A CHANGE IN LEADERSHIP WILL HELP US. BIdens GOT 2.5 yrs left in office. Even if Republicans Gain seats , he can still Veto like Obama did in his 2nd term in Office. Thats one of the Reasons i dont have much hope in Change. Both side will have to somehow reach a compromise, but i dont that will ever happen.
Gary Moses
Gary Moses Jun 14, 2022 5:34PM ET
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Iraklis Osaze
Iraklis Osaze Jun 14, 2022 5:34PM ET
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yea but the cost failed to put button 45%
Jun 14, 2022 4:44PM ET
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Fed will never get the rate over 2% mark my words. The USA has 30.6 trillion in debt and lets not forget about all those unfunded liabilities
Robert Moses
Robert Moses Jun 14, 2022 4:42PM ET
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if the fed jumps .75 i believe it is over compensating for missing the signs if months ago. Further can't the SEC halt these runs. they did so with Game Stop.
Robert Moses
Robert Moses Jun 14, 2022 4:42PM ET
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These DOW runs are completely fear, knee jerk motivated..
Mitchel Pioneer
Mitchel Pioneer Jun 14, 2022 4:38PM ET
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Wall Street once again laughs in the face of the US working class as more comedy unfolds in the laughingstock of the financial world.  Another round of flagrant, criminal manipulation "in late trade" saves another loss, with the NASDAQ hand placed in the green as predicted.  How many thousands of points in losses have magically vanished in the final 30 minutes of "trade" in this JOKE folks call a market?  How far is this FRAUD going to go?
 
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