Stock Market Today: S&P500 closes lower as Fed kicks off meeting
Investing.com -- The S&P 500 closed lower Tuesday, led lower by tech amid cautious trading as the Federal Reserve kicked off its two-day meeting and investors awaited further earnings from big tech.
At 16:00 ET (20:00 GMT), the S&P 500 fell 0.5%, and NASDAQ Composite slumped 1.3%, the Dow Jones Industrial Average rose 205 points, or 0.5%,
Fed kicks off two-day meeting
The Fed kicked off its two meeting that is expected to culminate in an unchanged decision on interest rates Wednesday.
But following a string of data showing inflation, investors will be looking for Fed Chair Jerome Powell to lay the groundwork for a September rate cut.
"Any indication of additional confidence in terms of inflation moving to its target or an upward adjustment in its assessment of the progress of inflation will presumably increase the odds of a September adjustment in policy," Stifel said in a note on Tuesday.
Markets have fully priced in a 25 basis point cut in September, with a small chance of a reduction of 50 basis points, and have 66 basis points of easing priced in by the end of the year.
Labor demand, consumer confidence surprise to upside
The start of the Fed meeting arrived on the heels of data showing that job openings, a measure of labor demand, fell to 8.18M in June from 8.23M in May, though that was still above economists estimates of 8.18M.
Signs of ongoing labor demand underpinned consumer confidence in July, which rose to a reading of 100.3 from 97.8 the prior month.
Tech stumbles ahead of Microsoft earnings
Tech led the market lower, with NVIDIA Corporation (NASDAQ:NVDA), down 7%, driving downside momentum as rotation out of the tech resumed.
There are more key earnings to digest this week, starting with Microsoft (NASDAQ:MSFT) reporting its June quarter earnings after the bell on Tuesday.
The earnings report from Microsoft will be closely watch to "gauge the adoption of the AI Revolution as Microsoft and Nvidia (NASDAQ:NVDA) are the two best barometers in technology on the pace of AI adoption globally," Wedbush said earlier this week.
Beyond Microsoft, tech heavyweights Meta Platforms (NASDAQ:META) and Apple (NASDAQ:AAPL) are set to report earnings on Wednesday and Thursday, respectively.
PayPal, JetBlue in earnings delight; Merck falls after cutting guidance
JetBlue (NASDAQ:JBLU) stock soared 12% after the low-cost carrier posted a surprise second-quarter profit and announced plans to deepen its cost cuts.
PayPal (NASDAQ:PYPL) stock rose more than 8% after the payments giant raised its forecast for full-year adjusted profit for the second time, betting on resilient consumer spending in the back-to-school and upcoming holiday shopping seasons.
Merck (NYSE:MRK) stock slumped more than 9% after the drug maker cut its full-year earnings forecast mainly due to one-time charges from its acquisition of eye-focused drug developer EyeBio.
Pfizer (NYSE:PFE) stock was up nearly 1% after the drugs giant raised its annual profit forecast after reporting better-than-expected sales of its COVID vaccine and antiviral treatment.
Gold jumps as Israel strikes Beirut
Gold Futures rose 1% as investors pored into the safe-haven metal after Israel said it had launched a target strike in Beirut, stoking fears of an Israel-Lebanon war.
(Peter Nurse, Ambar Warrick contributed to this article.)
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