Dow, S&P 500 pound drops most in a month after Fed minutes show plans to cut later this year

What did the main clues lead to?

• Dow
  DJIA,
  + 0.65%

  Lost 382.59 points, or 1.1% to finish at 34,960.69.

• S&P 500
  SPX,
  + 0.81%

  He fell 47.81 points (1.1%) and finished at 4,400.26.

• Nasdaq Composite Index
  COMP,
  + 1.19%

  It finished at 14,525.91, down 130.27 points, or 0.9%.

The Dow Jones fell 282.12 points (0.8%) on Tuesday, while the S&P 500 fell 0.7%, retreating from record levels after data showed retail sales of July were better than expected. .. The Nasdaq fell 0.9%.

What drove the market?

The Federal Reserve has stepped up discussions on the timing of the central bank’s final withdrawal from simple monetary policy, according to the minutes of the July 27-28 central bank policy meeting released on Wednesday afternoon. I leave you.

The minutes showed plans to consider slashing monthly purchases of central bank asset-backed securities by $ 120 billion, possibly by year-end, but interest rates remain close to zero for a while. He also suggested the possibility of being.

read: “Most” Federal Officials Backed This Year’s Start, July Conference Minutes Show

Randy Frederick, vice president of commerce and derivatives at Charles Schwab in Austin, Texas, said of next week’s monetary policy symposium in Jackson Hole: Wyoming, Jackson Hall.

That said, light options trading suggests at next week’s summit that “most people don’t think the Fed is saying a lot or that the market isn’t very responsive,” Frederick said. I told MarketWatch over the phone. maintenance.

State Street Global Advisor’s chief investment strategist Michael Alone said consumer confidence and US retail sales collapsed as stocks fell and gold prices rose after council minutes governance of the Federal Reserve. Jitter on the pace of economic recovery.

“I think the Fed could reduce monetary policy support during times that may be scarce for economic recovery,†Arone said.

According to news reports earlier this week, policymakers are set to strike a deal to start cutting back on purchases by November. The Wall Street Journal report Some policymakers were trying to complete their purchases by mid-2022.

“Since the FOMC meeting in July, the September announcement and the start date for reducing those purchases in October or November have increased significantly, and it is very important that the August salary release is announced in early September. . Bob Miller of Blackrock, head of US Core Bonds, wrote a comment in an email.

St. Louis Fed Governor Bullard said on Wednesday that the US economy would not be upset by the delta variants of the coronavirus, but pointed to a bright red US real estate market that should be carefully watched at noon. Interview with MarketWatch.. Bullard is not a voting member of the Fed’s decision-making committee this year, but will be next year.

Boston Fed Governor Eric Rosengren, who is also a voting member of next year’s policy-making committee, will cut back on large-scale asset purchases this fall as inflation and rising prices rise. debt burden could ultimately threaten the recovery. Said to support. Financial Time..

“The question is, what will inflation look like then,” Kent Engelke, chief economic strategist at Capitol Securities, told MarketWatch. “I think inflation is gaining ground. Today’s housing data shows inflation is systemizing as rents rise sharply.

The market has been volatile since the end of a series of records for the S&P 500 Index and the Dow Jones Industrial Average, and stocks that appeared to have been hurt by questions about the effects of the spread of the delta variant of the coronavirus. , the two largest economies in the world. It represents a remarkable resurrection. United States and China.

You have to know: Labor Day has been a turning point in the market for the past three years. It shows what a strategist does next.

In Wednesday’s US economic data, Homebuilder starts construction According to the US Census Bureau, a seasonally adjusted annual rate of 1.53 million households in July represents a reduction of 7%. report.. On the other hand, the number of new housing permits is seasonally adjusted at an annual rate of 1.64 million, an increase of 2.6% from June and 6% from there. is one year old.

In COVID News, the Biden administration on Wednesday confirmed that most Americans could do it soon this Friday. Get a COVID-19 reminder 8 months after full vaccination.

The news is that the daily average of new cases is up 52% ​​from two weeks ago, 4.5 times the average of 31,138 times a month ago. According to the New York Times tracker.. The average daily death toll on Tuesday rose from 704 Monday to 696, and hospitalizations rose from 82,519 Monday to 83,291, the highest since February 11.

reference: Investors compare the stock market rally of 2021 to the summer before the crash of 1987 – should they?

What company has the focus been on?

• To share Target Co., Ltd.
  target,
  + 3.26%

  Although it fell 2.8% on Wednesday, results exceeded earnings and earnings expectations. Slow growth COVID-19 In high price shopping activities.

• Krispy Kreme ink
  DNUT,
  + 1.07%

  Late Tuesday The loss increases in the springHowever, executives blamed the cost reductions associated with returning to the open market and set annual forecasts that exceed analysts’ estimates. Shares fell 6.9% on Wednesday.

• To share Loews Kos. Moo 9.6% increase Wednesdayy, The outlook for the full year is good after renovation retailers reported higher than expected earnings, sales and same-store sales in the second quarter.

• The Children’s Place Co., Ltd... PLCE Shares fell 6.5% after retailers of children’s clothing and accessories reported lower than expected second-quarter profits on the streets.
• TJX Cos. TJX After a loss of $ 214.2 million (18 cents per share) last year, second-quarter net income rose to $ 785.7 million (64 cents per share). Its inventory increased 5.6%.

• To share Gestion Lumentum Inc.. Light It rose 1.8% on Wednesday after a good outlook after optical network companies turned to fourth-quarter earnings and reported higher-than-expected earnings.

• Chilean parents Brinker International Co., Ltd... to eat Shares rose 1.3% after restaurant companies reported lower-than-expected earnings in the fourth quarter.

• Lululemon Athletica Inc.. Louie He said on Wednesday that he had invested in Genomatica, a company that makes sustainable materials. Stock prices fell 0.3%.
• Analog devices.. ADI As gross margin improved, the outlook for the fourth quarter was in line with expectations, with shares of chipmakers down 0.3%, so Wednesday’s third quarter earnings and revenue rose. been better than expected.

How did the other assets work?

• 10-year government bond yield TMUBMUSD10Y It was 1.273%, or 1.5 basis points higher. The yields and prices of debt move in opposite directions.

• ICE USD Index DXYMeasures of currencies against the baskets of the six major rivals were largely unchanged, advancing less than 0.1% on the session.

• U.S. benchmarks closed oil futures lower NS. 1 The New York Stock Exchange fell 1.7% to $ 65.46 a barrel. Gold futures GC00 Lows also fell, down 0.2% to $ 1,784.40 an ounce, but rose after the Fed minutes.

• For European equities, Stocks Europe 600 SXXP London’s FTSE 100 rose 0.1% UKX It fell 0.2%.

• In Asia, Shanghai Composite SHCOMP Add 1.1%, Nikkei 225 in Japan Nik Hong Kong’s Hang Seng Index rose 0.6% HSI Closed 0.5% higher in the session.

William Watts contributed to the report