The Dow Jones Industrial Average closed at 26,864.27 on Wednesday with a loss of 333.75 points or -1.23%. The S&P 500 closed at 2,980.38 for a loss of 32.80 points or -1.09%. The Nasdaq Composite closed at 8,175.42 for a loss of 98.19 points or -1.19%. The VIX Volatility Index was higher at 15.94, increasing 2.00 points or 14.35%.
Wednesday’s market movers
U.S. indexes closed lower Wednesday, following the Federal Reserve’s announcement of a 25 basis point rate cut for the federal funds rate. The day’s losses reflect some small market adjustments, expectations that the Fed’s decrease is not part of a long-term plan and rising uncertainties overall pertaining to a China trade deal.
The Fed’s decision to decrease rates was consistent with market expectations, though there was an approximately 25% probability the Fed would implement a 50 basis point rate cut. The central bank also announced it would stop shrinking its balance sheet two months earlier than planned. The Fed’s decision comes with moderate global gross domestic product growth and PCE Price Index inflation that is below the Fed’s 2% target. Tuesday’s PCE Price Index report showed inflation at 1.4%.
Earnings continued make top headlines with the following announcements:
- Apple Inc. (AAPL, Financial): Up 3.21% after beating revenue and earnings in announcement Tuesday night.
- General Electric Co. (GE, Financial): Missed revenue estimates. Earnings per share beat by 5 cents.
- Baker Hughes, a GE Company (BHGE, Financial): Beat earnings estimates by 1 cent. Stock gained 3.59%.
Economic reports affecting market trading included the following:
- The MBA Mortgage Applications Index decreased 1.4% and the MBA’s average 30-year mortgage rate was unchanged at 4.08%.
- The ADP private sector employment report showed payrolls increasing 156,00 following an increase of 112,000 and beating the forecast of 148,000.
- The Bureau of Labor’s Employment Cost Index increased 0.6% in the second quarter following an increase of 0.7%.
- The EIA’s Weekly Petroleum Status report showed crude oil inventory down 8.496 million barrels following a decrease of 10.835 million barrels.
- The Federal Reserve’s Federal Open Market Committee reduced its federal funds target rate by 25 basis points to 2.0% to 2.25%. It also announced an end to balance sheet runoff.
In the S&P 500, consumer staples, materials and technology led losses. In the Dow Jones Industrial Average, the following stocks led losses:
- Microsoft (MSFT, Financial) -2.49%
- Verizon (VZ, Financial) -2.07%
- UnitedHealth (UNH, Financial) -1.90%
Small-cap stocks
In small caps, the Russell 2000 closed at 1,574.60 for a loss of 10.99 points or -0.69%. The S&P 600 closed at 963.40 for a loss of 4.30 points or -0.44%. The Dow Jones U.S. Small-Cap Growth Index closed at 10,160.51 for a loss of 89.15 points or -0.87%. The Dow Jones U.S. Small-Cap Value Index closed at 9,601.18 for a loss of 83.67 points or -0.86%.
Other notable indexes
Other notable index closes included the S&P 400 Mid-Cap Index at 1,966.72 for a loss of 20.08 points or -1.01%; the S&P 100 at 1,317.09 for a loss of 15.56 points or -1.17%; the Nasdaq 100 at 7,848.78 for a loss of 103.69 points or -1.30%; the Russell 3000 at 1,754.65 for a loss of 18.39 points or -1.04%; the Russell 1000 at 1,652.40 for a loss of 17.73 points or -1.06%; the Wilshire 5000 at 30,596.61 for a loss of 320.75 points or -1.04%; and the Dow Jones U.S. Select Dividend Index at 716.19 points for a loss of 5.49 points or -0.76%.
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