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Wall Street ended lower on Monday, dragged down by mega-cap growth stocks. Uncertainty about the mutiny in Russia and the Fed’s future policy moves had an adverse effect on the market. All three major indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell less than 0.1% or 12.72 points to close at 33,714.71. Sixteen components of the 30-stock index ended in positive territory, while 14 ended in negative.
The S&P 500 lost 0.5%, or 19.51 points to close at 4,328.82. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Real Estate Select Sector SPDR (XLRE), the Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) advanced 2.2%, 1.8% and 1%, while the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) slid 1.3% and 1%, respectively.
The tech-heavy Nasdaq declined 156.74 points, or 1.2%, to finish at 13,335.78.
The fear-gauge CBOE Volatility Index (VIX) was up 6% at 14.25. A total of 9.3 billion shares were traded on Monday, lower than the last 20-session average of 11.6 billion. Advancers outnumbered decliners on the NYSE by a 1.91-to-1 ratio. On the Nasdaq, a 1.15-1 ratio favored the declining issues.
The Russian Situation Flusters Investors
Even as reports emerged that the Wagner militia stood down from its advance to Moscow during the weekend, the lack of clarity about the domestic political situation in Russia has kept investors nervous. President Vladimir Putin has, in an address made to the nation, thanked the mercenary fighters who stood down from the mutiny to avoid what he called "fratricidal bloodshed".
However, it remains unclear what exactly happened in those 24 hours and it is a developing story. Wagner chief Prigozhin has also remained away from the public eye since calling off his march to Moscow, and his whereabouts are not known. Political turmoil in Moscow might sound like an immediate advantage for Ukraine in the war, but an unstable Russia is bad news for economies around the world.
The U.S. State Department spokesperson, Matthew Miller, said on Monday that the situation in Russia continues to remain dynamic. Investors are closely following the story, albeit in a circumspect manner.
Market Awaits Further Direction From The Fed
After Fed Chair Jerome Powell’s deposition in the U.S. Congress last week, and various other Fed officials’ mulling over the topic, currently, there is a general consensus that the Fed would continue to raise rates, at least by another 50 bps before the year ends. Also, they might resume hiking rates as early as the July meeting.
However, investors eagerly await further direction from the Fed as to the outlook it has about the state of the economy and how much further tightening may be in the cards. Mega-cap growth stocks, mainly from the tech and consumer discretionary sectors, suffered on Monday because, in an uncertain environment like the currently prevailing one, these seem overvalued with respect to their prospects.
The tech-focused Nasdaq, which had snapped an eight-week winning run at the end of last week, continued to fall as tech stocks slid.
Image: Bigstock
Stock Market News for Jun 27, 2023
Wall Street ended lower on Monday, dragged down by mega-cap growth stocks. Uncertainty about the mutiny in Russia and the Fed’s future policy moves had an adverse effect on the market. All three major indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell less than 0.1% or 12.72 points to close at 33,714.71. Sixteen components of the 30-stock index ended in positive territory, while 14 ended in negative.
The S&P 500 lost 0.5%, or 19.51 points to close at 4,328.82. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Real Estate Select Sector SPDR (XLRE), the Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) advanced 2.2%, 1.8% and 1%, while the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) slid 1.3% and 1%, respectively.
The tech-heavy Nasdaq declined 156.74 points, or 1.2%, to finish at 13,335.78.
The fear-gauge CBOE Volatility Index (VIX) was up 6% at 14.25. A total of 9.3 billion shares were traded on Monday, lower than the last 20-session average of 11.6 billion. Advancers outnumbered decliners on the NYSE by a 1.91-to-1 ratio. On the Nasdaq, a 1.15-1 ratio favored the declining issues.
The Russian Situation Flusters Investors
Even as reports emerged that the Wagner militia stood down from its advance to Moscow during the weekend, the lack of clarity about the domestic political situation in Russia has kept investors nervous. President Vladimir Putin has, in an address made to the nation, thanked the mercenary fighters who stood down from the mutiny to avoid what he called "fratricidal bloodshed".
However, it remains unclear what exactly happened in those 24 hours and it is a developing story. Wagner chief Prigozhin has also remained away from the public eye since calling off his march to Moscow, and his whereabouts are not known. Political turmoil in Moscow might sound like an immediate advantage for Ukraine in the war, but an unstable Russia is bad news for economies around the world.
The U.S. State Department spokesperson, Matthew Miller, said on Monday that the situation in Russia continues to remain dynamic. Investors are closely following the story, albeit in a circumspect manner.
Market Awaits Further Direction From The Fed
After Fed Chair Jerome Powell’s deposition in the U.S. Congress last week, and various other Fed officials’ mulling over the topic, currently, there is a general consensus that the Fed would continue to raise rates, at least by another 50 bps before the year ends. Also, they might resume hiking rates as early as the July meeting.
However, investors eagerly await further direction from the Fed as to the outlook it has about the state of the economy and how much further tightening may be in the cards. Mega-cap growth stocks, mainly from the tech and consumer discretionary sectors, suffered on Monday because, in an uncertain environment like the currently prevailing one, these seem overvalued with respect to their prospects.
The tech-focused Nasdaq, which had snapped an eight-week winning run at the end of last week, continued to fall as tech stocks slid.
Consequently, shares of Alphabet Inc. (GOOGL - Free Report) and Meta Platforms, Inc. (META - Free Report) dropped 3.3% and 3.6%, respectively. Each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.