© Reuters. FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan neighborhood of New York City, New York, United States on April 16, 2021. REUTERS / Carlo Allegri
By Devik Jain and Medha Singh
(Reuters) – That was supposed to open at a record high on Wednesday, with investors focusing on business data after Federal Reserve officials tried to allay fears of a severe tightening of monetary stimulus.
Tech heavyweights Facebook (NASDAQ :), Apple Inc (NASDAQ :), Amazon.com (NASDAQ :), Nvidia (NASDAQ 🙂 and Microsoft Corporation (NASDAQ 🙂 up in pre-trading.
Microsoft was also the second US company to exceed a market cap of $ 2 trillion.
IHS Markit’s flash measurement of manufacturing and services PMI data due at 9:45 a.m. ET (1345 GMT) is expected to show a slight improvement in business activity this month compared to May.
In a hearing before a panel of the US House of Representatives, Fed Chairman Jerome Powell reiterated that the central bank would not hike interest rates too quickly just because of fears of inflation and promote a “broad and inclusive” recovery in the labor market.
Powell’s comments follow the Fed’s forecast to hike rates as early as 2023 earlier than expected, sparking strong profit posting in so-called “reflations” stocks and a move to tech-heavy growth stocks.
However, market participants switched between value and growth stocks this week, with the Nasdaq posting a record high on Tuesday, boosted by strong gains in top tech companies.
“Equities have hit all-time highs again and that shows that the market is shrugging at the Fed announcement,” said Johan Grahn, Vice President and Head of ETF Strategy at AllianzIM in Minneapolis.
“Powell sowed the seeds for tapering … the Fed is paving the way for further discussion on tapering itself and that, along with the next time they talk about rates, will create some volatility in the markets.”
The S&P growth index was up 3.9% in June, closing the gap on its value counterpart, which fell 2% this month but is still up more than 14% year-over-year.
At 8:24 p.m. ET, they rose 61 points or 0.18%, 4.5 points or 0.11%, and 16 points or 0.11%.
Price-sensitive Goldman Sachs (NYSE :), JPMorgan Chase & Co (NYSE :), Morgan Stanley (NYSE 🙂 and Bank of America (NYSE 🙂 gained between 0.4% and 0.6%.[US/]
Energy stocks Occidental Petroleum Corp (NYSE :), ConocoPhillips (NYSE 🙂 and Exxon Mobil (NYSE 🙂 rose in the 0.6% to 1.4% range as oil prices hit more than a two-year high. [O/R]
Among the so-called meme stocks, software company Alfi Inc lost 10% after more than doubling in the previous session, while Torchlight Energy Resources (NASDAQ 🙂 Inc plunged 15% on day two after announcing an increase in its stock offering.
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