The stock market remained quiet midday Wednesday as investors waited to see if banking woes will cause the Fed to shift its stance on interest rates. GameStop's profitable quarter sparked a rally in meme stocks.
The Dow Jones Industrial Average was down 0.1% at midday.
Nike shares fell 1.4% to settle back near the 50-day moving average. The stock continues to form a cup base with a 131.41 buy point. Nike late Tuesday beat profit estimates for its February-ended quarter and raised full-year revenue guidance. But it warned of weaker profit margins.
Boeing was a bigger drag on the Dow, falling more than 2%. The aerospace giant may take another charge on its Air Force tanker program, Dow Jones Newswires reported.
The S&P 500 was up a fraction as it reaches a test of resistance at the 200-day moving average. The Nasdaq composite climbed 0.2%. The Nasdaq is performing better, holding above its 50- and 200-day averages.
Volume fell on the Nasdaq and NYSE compared with the same time Tuesday.
Small caps lagged, with the Russell 2000 off 0.6%, as a number of regional banks fell.
The Innovator IBD 50 ETF was flat, despite another strong day for footwear component and market leader On Holding.
ONON stock continued its torrid run, adding more than 6%. It is now up 20% from its 24.21 buy point, so investors can consider taking some profits. Morgan Stanley and other analysts raised their price targets after Tuesday's earnings-driven rally.
Bank Crisis May Alter Fed's Outlook
Stock market trading should go from quiet to active after 2 p.m. ET, when the Fed announces its decision on interest rates. Most traders expect a quarter-point increase, to a target range of 4.75%-5%.
The Federal Reserve has made it clear it wants to continue tightening until it sees inflation tamed. But this time, policymakers face bank failures and the threat that liquidity problems will spread to more institutions. While dozens of banks could be exposed, regulators don't have a clear idea which are in imminent danger.
Those new risks may alter how the Fed approaches rate policy. Some on Wall Street worry a banking crunch will hurt the economy, and believe rate increases need to pause.
The 10-year Treasury yield fell 2 basis points to 3.58% ahead of the Fed announcement.
Bank stocks were moderately lower ahead of Wednesday's big event. SPDR S&P Bank ETF and SPDR S&P Regional Bank ETF were both down 1.6% at midday.
In the tech sector, Aehr Test Systems is trying to break out of a V-shape base. Shares edged above the 37.67 buy point in heavy trading.
Stock Market Today: GameStop, Carvana Lead Meme Rally
GameStop, which gained popularity in 2021 as part of the meme stock market mania, soared 42% to the highest price since December. The video game retailer surged past January-quarter estimates, posting a profit of 16 cents per share, vs. a year-ago loss of 47 cents. Net sales fell 1.2% to $2.226 billion.
Volume skyrocketed as the stock tests its 200-day moving average. GameStop is on pace for its best day since March 25, 2021, according to Dow Jones Market Data. That's when it rose nearly 53% at the height of the meme mania.
Other meme stocks moved in sympathy.
Carvana vaulted 22%, AMC Entertainment rose 3.5% but Bed Bath & Beyond fell 1.4% at midday.
Troubled automotive retailer Carvana projected a Q1 net loss of $506 million. But traders chose to focus on a better-than-feared operating revenue forecast of $2.4 billion to $2.6 billion.
RV maker Winnebago Industries gapped up in heavy trading. It reported lower year-over-year profits and sales, but the results still beat views. The RV industry is dealing with lower demand after a boom during the pandemic.
Winnebago's February breakout failed, and the stock is now trying to craft a new pattern. It is meeting resistance at the 50-day moving average.
High-rated Enerpac Tool Group broke below its 50-day line in heavy volume, despite raising its 2024 fiscal outlook to a "new goal of $50-$60 million." The lack of a single analyst estimate ahead of the report may have spooked investors.
