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S&P 500 Index Struggling Ahead of Fed Minutes; Drop in Oil Prices Capping Gains

By:
James Hyerczyk
Updated: Nov 23, 2022, 15:39 UTC

The Fed minutes could offer further insights into whether it will slow interest rate hikes and what it will take for them to be paused entirely.

S&P 500 Index

The major U.S. stock indexes are putting in a mixed performance on the opening on Wednesday with traders taking their cues from churning global markets. Meanwhile, traders are preparing for the late afternoon release of the minutes of a Federal Reserve meeting that could shed light on whether the U.S. central bank was considering moderating interest rate hikes.

At 14:30 GMT, the blue chip Dow Jones Industrial Average is trading 34092.00, down 34.00 or -0.10%. The benchmark S&P 500 Index is at 4009.00, down 1.25 or -0.03% and the tech-heavy NASDAQ Composite is trading 11766.25, down 11.75 or +0.10%.

Drop in Crude Oil Weighing on S&P 500 Index

S&P 500 Index energy stocks are lower after crude oil prices tumbled as the Group of Seven (G7) nations looked at a price cap of $65 to $70 a barrel on Russian oil, above where the crude grade is currently trading.

Also weighing on prices were worries over China demand as a sharp rise in COVID cases could prompt the government to implement even stricter curbs.

Weekly Jobless Claims Were Higher than Expected

Jobless claims rose to 240,000 in the week ending November 19, the Department of Labor reported Wednesday. That was higher than the 225,000 economists expected and also notched the highest level since the second week of August.

The rise in unemployment claims fits well with the Fed’s narrative of weakening the labor market with rate hikes in an effort to drive down inflation.

Durable Goods Solid

Durable Goods for October were also released Wednesday ahead of the Thanksgiving holiday Thursday. The report showed that durable goods orders increased 1% in October, more than the 0.5% expected.

This is not good news for those betting on a slowdown in rate hikes by the Fed. Just like last week’s retail sales report, the consumer just keeps on spending, putting upside pressure on prices, leading to stubborn inflation.

Fed Minutes on Tap

Investors are hoping to gain further insights into whether the Fed will slow interest rate hikes and what it will take for them to be paused entirely when the central bank’s November meeting minutes are released on Wednesday at 19:00 GMT.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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