The major stock market indexes closed mixed Wednesday after a volatile afternoon of trading following the Fed statement and Fed Chair Jerome Powell's comments. The Federal Reserve held interest rates unchanged, but left the door open to more hikes.
Immediately after the Federal Open Market Committee (FOMC) announced its decision at 2 p.m. ET, the main indexes slid. The Fed said it paused to gauge the impact of its tightening policy but indicated two more rate increases are still on the table.
"Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy," the policy statement said.
At a news conference, Powell said the "full effects of tightening have yet to be felt" and that "some further rate increases are likely appropriate this year."
The market expected the Fed to skip a rate hike this time around. After the Fed announcement, the CME FedWatch tool showed over 60% odds for a quarter-point hike at the July Fed meeting. The 10-year U.S. Treasury yield trimmed 4 basis points to 3.80% after the news.
The May final Producer Price Index fell 0.3% vs. the 0.1% drop consensus. The year-over-year number rose 1.1% vs. the 1.6% increase expected, and was lower than the prior 2.3% reading. The core number excluding food and energy rose 0.2% and was in line with projections. The year-over-year figure increased 2.8% vs. the 2.9% projected, which slowed from the prior month's 3.2% increase.
Index Moves
The Nasdaq advanced 0.4% after a late rebound. The Dow Jones Industrial Average slid 0.7%. The S&P 500 inched 0.1% higher. The Russell 2000 dropped 1.2%.
The Innovator IBD 50 ETF reversed to a 0.7% loss.
NYSE volume fell and Nasdaq volume rose from Tuesday's levels, according to preliminary numbers.
Crude oil fell 1.1% to $68.67 per barrel. Gold futures edged 0.1% higher. The price of Bitcoin shed 1.2% to $25,550.
Stock Market Movers: IBD 50 Stock Hits All-Time High
Symbotic shares are extended after adding another 2.6% to their recent run. SYM was the IBD 50's biggest gainer today. The AI-focused robotics company hit an all-time high Wednesday and has gained over 300% this year.
Oracle rallied 4.8% in heavy volume, after Goldman Sachs raised its price target to 120 from 75 and maintained its neutral rating on the stock.
Oracle shares gapped up 6% on Tuesday, following the company's better-than-expected May-quarter results late Monday. Shares of the database software and cloud computing stock hit a 52-week high on Wednesday.
Advanced Micro Devices gained 2.3% after Reuters reported Amazon.com is considering AMD's newest AI chip for its AWS cloud-computing business.
The chip stock has climbed more than 20% from its 102.43 buy point, so investors who bought at that level can take some profits. Shares have held onto gains from the late May chip-stock rally. Several analysts raised their price targets on AMD Wednesday.
AI chip leader Nvidia added another 4.8% to its big run. Shares have gained over 190% this year so far.
Logitech tumbled 11.1% on news CEO Bracken Darrel is stepping down, but will stay on to help with the transition to find a new leader.
The computer peripherals company that did so well during the pandemic has struggled with declining sales and earnings for six consecutive quarters. Wednesday's sharp drop sent shares below the 50-day moving average, a sell signal.
Market Resilient After Fed Shocker; Big Warning Fuels This Group
Medical Device Stock Breaks Out While Insurers Sell Off
UnitedHealth Group tumbled 6.4% after CEO Tim Noel warned of a higher number of routine surgeries in seniors in the last two months. The rise is likely to raise costs for health insurers in the second quarter. UNH is the Dow Jones' biggest loser today.
Rival Humana plunged 11.2% in huge volume in sympathy with UNH. Humana was already trading below the 50-day moving average and fell below the 200-day moving average on Wednesday, a red flag. HUM was the S&P 500's biggest loser today.
CVS Health, which owns insurer Aetna, sank 7.8% in heavy volume along with the managed care group.
Meanwhile, medical products and services stock Steris gained 2.7% and broke out of a cup-with-handle base with a 212.81 buy point. But volume was light.
Other medical device stocks got a lift from UnitedHealth's comments.
Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.
