U.S. Stocks Mixed; Pressured by Banking, Energy Sectors; Supported by Technology

U.S. equity markets traded mixed on Wednesday as technology stocks made a recovery, the energy sector tumbled and all three major indexes experienced some volatility in reaction to the minutes of the Fed’s June monetary policy meeting.

In the cash market, the benchmark S&P 500 closed at 2432.54, up 3.53 or +0.15%. The blue chip Dow Jones Industrial average settled at 21478.17, down 1.10 or -0.01% and the technology-based NASDAQ Composite ended the session at 6153.13, up 43.07 or +0.70%.

The NASDAQ Composite posted a nice recovery led by beaten-down tech stocks including Facebook, Amazon, Apple, Netflix and Google-parent Alphabet.

The strong technology sector also helped underpin the S&P 500 Index, but gains were limited by a plunge in the energy sector. Oil stocks fell in reaction to a 4 percent drop in crude oil prices as evidence indicated OPEC exports rose last month.

Weakness in the banking sector in reaction to the Fed minutes pressured the Dow and kept a lid on the S&P 500.

Fed Minutes

The Fed minutes showed that Fed officials continued to indicate a determination to raise interest rates even with sub-par inflation levels. They continued to call the muted inflation levels a temporary condition while calling for inflation to rise over the long run to a targeted level of 2 percent.

The minutes also showed that Fed officials believe the central bank’s massive $4.5 trillion balance sheet can be reduced with “limited” disruption to financial markets. However, investors felt disappointed because the Fed offered no clue as to when the balance sheet trimming process will begin.

Economic News

In other news, factory orders fell 0.8 percent in May, more than expected. On Thursday, investors will get the opportunity to react to the latest private sector jobs data from ADP and ISM Non-Manufacturing PMI.

Crude Oil

U.S. West Texas Intermediate and internationally-favored Brent crude oil fell over 4% on Wednesday as investors reacted to data which showed OPEC’s exports rose in June. In other news, Saudi Arabian state oil giant Saudi Aramco on Wednesday said it would cut prices for light crude grades to customers in Asia in August, a sign of rising competition in the key demand hub.

Crude prices also plunged in reaction to a report that Russia has ruled out deeper production cuts. Russia is the largest non-OPEC contributor to the output cut deal.

Gold

August Comex gold futures were able to eke out a small gain on Wednesday after Federal Reserve minutes released the day before showed the central bank was split on how inflation might affect the pace of future rate hikes.

The U.S. Dollar retreated from its high after the minutes were released. This also helped support the dollar-denominated gold market.