S&P 500 Slips as Fed Decision Looms

© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 was sluggish Wednesday as investors kept their powder dry with under an hour to go until the Federal Reserve’s decision.

The fell 0.27%, and the was down 0.41%, or 141 points, and the was down 0.1%.

The Fed isn’t expected to announce major policy tweaks, with its benchmark rate and monthly bond purchases of $140 billion expected likely to remain on hold. “We do not believe the Fed will offer any new clues around the timing of tapering nor on implementation mechanics at the upcoming meeting,” Wells Fargo (NYSE:) said in a note.

But further clues on how much progress the economy has made toward the Fed’s goals will garner investor attention. “We anticipate this [progress] to be reflected in the updated summary of economic projections along with the views from participants on the federal funds rate level over the next few years,” Wells Fargo added.

will be closely watched as a barometer of investor confidence in the Fed’s message as sluggish action in rates have been taken a sign the market is backing the Fed’s outlook on the economy and inflation.

“On a dovish Fed statement, maybe the Treasury curve sells off a little bit. Growth names, typically do well when treasuries prices rally (yields decline), and the cyclical, more value type stocks, not do as well,” Peter Duffy, chief investment officer of credit at Penn Capital Management told Investing.com in an interview Tuesday.

Ahead of the Fed decision the 10-year Treasury yield was below 1.49% and tech was largely flat.

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Google-parent Alphabet (NASDAQ:), Microsoft (NASDAQ:), Apple (NASDAQ:),  Amazon.com (NASDAQ:) and Facebook (NASDAQ:) were mixed.

Oracle (NYSE:), meanwhile fell 5% after its softer second-quarter guidance offset first-quarter results that beat on both the top and bottom lines.

Cyclicals, which tend to move in tandem with an improving economy, were under pressure, with financials and materials, the worst performing sectors on the day.

Energy stocks were 1% lower as oil prices pared some of their recent gains, though remained close to October 2018 highs, as weekly stockpiles fell more than expected.

Crude oil inventories fell 7.355 million barrels last week, compared with analysts’ expectations for a draw of 3.29 million barrels.

In other news, Roblox (NYSE:) slumped 8% on signs the reopening is denting demand for gaming. The video game platform reported 43 million daily active users for May, up 28% compared to a year earlier but down from 43.3 million in April.

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