NASDAQ, S&P 500, Dow Jones Analysis – Stocks Pull Back From Session Highs After Hawkish FOMC Minutes

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S&P 500 moved away from session highs after the release of the hawkish FOMC Minutes.

FOMC Minutes indicated that Fed members remained focused on the central bank’s fight against inflation. According to the FOMC Minutes, “No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023. Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time.”

At this point, it looks that some traders do not believe that the Fed will be able to push the interest rate above the 5.00% level as the economic data will force the central bank to drop its aggressive plans. Today’s ISM Manufacturing PMI report, which showed that factory activity contracted, showed that higher interest rates have already started to put material pressure on the economy.


The hawkish FOMC Minutes have also put pressure on NASDAQ, which is sensitive to the interest rate outlook.

The weak performance of Microsoft stock, which is down by more than 5% in today’s trading session, has also hurt NASDAQ’s performance. The stock gained downside momentum after UBS downgraded Microsoft amid worries about slowing growth of its cloud services and Office.

Alphabet and Amazon have also moved lower today as traders focused on the potential obstacles for growth of these mega cap companies.

Dow Jones

Dow Jones moved back towards the negative territory after the release of the FOMC Minutes. The weak performance of Microsoft, UnitedHealth Group, and Honeywell put material pressure on the index.

Interestingly, the losses of the only energy stock in the Dow Jones, Chervon, were limited despite the major pullback in the oil markets which pushed WTI oil towards the $73 level.

For a look at all of today’s economic events, check out our economic calendar.