By Yasin Ebrahim
The Dow climbed Wednesday, as the recent revival in tech continued to boost stocks even as investors digested the Federal Reserve’s June meeting minutes reaffirming the central bank’s commitment to fight inflation,
The Fed’s minutes showed members were in favor of “moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.”
Tech stocks did most of the heavy lifting, picking from where they left off a day earlier, to help steady the broader market.
Amazon said it had taken a stake in Grubhub to provide Amazon Prime subscribers with food-delivery perks including food-delivery fee waivers. Uber (NYSE:UBER) and DoorDash (NYSE:DASH) fell sharply, down more than 4% and 7% respectively.
For a second-straight day, energy stocks were a major drag on the broader market as oil prices deepened their losses from a more than 9% slump a day earlier, pressured by concerns that a recession will severely hurt demand.
Citigroup warned earlier this week that oil prices could plummet to $65 a barrel by the end of this year and fall to about $45 by the end of 2023 if the economy falls into recession.
A key part of the Treasury yield curve, the 10-year yield over the two-year yield, remained inverted – a key recession indicator – though steepened slightly from a day earlier following better-than-expected economic data.
Services activity was better-than-expected in June, while job openings beat economists’ estimates, pointing to a labor market that is likely running too hot, which isn’t good news for bets on inflation peaking.
“While employment growth is slowing gradually, that slowdown is more driven by supply constraints rather than demand weakness, which creates continued upside for wages,” Jefferies said in a note.
In other news, Rivian Automotive (NASDAQ:RIVN) said it delivered more than 4,000 vehicles in the second quarter, keeping it on track to deliver 25,000 vehicles this year, sending its shares 10% higher.