Today on the market – Wed 08/01

Powered by Apple Inc.’s strong earnings, the S&P 500 index was lifted higher in the open hours. Registering today’s high at 2825.83 led by technology and financial stocks, the index turned gains as investors remained cautious ahead of the closely-watched Federal Open Market Committee (FOMC) statement.

Emotions were further dampened by renewed trade tensions following news that the Trump administration plans to increase Chinese goods tariffs to $ 200 billion to 25% from the previously announced 10%.

The index fell sharply next to the release of the FOMC statement, registering today’s low at 2805.85 as the Federal Reserve signaled yet another impending rate hike. By paring some of the losses as investors digested the Fed announcement, the index closed the session low of 2813.36, down a weak 2.93 points and lost 0.10% over the previous session.

The energy sector led the day’s decline, losing 1.33% in today’s session. Oil prices remained unstable and closed lower, after an Energy Information Administration (EIA) report indicated a surprising increase in crude production by 3.8 million barrels a week along with a fall in production. Chesapeake Energy Corp. led the sector decline, losing 5.72% after reporting a fall in its revenue as a result of a fall in oil and gas sales.

Renewed trade war problems are weighed down by trade-sensitive sectors in industry, materials and consumers. These sectors plunged 1.28%, 0.97% and 0.44%, respectively, after the White House announced its plan to increase customs duties on Chinese goods worth $ 200 billion to 25% from the previously announced 10% . Hanesbrands Inc. was the worst provider in the index, tumbling 19.32% after reporting disappointing earnings.

Other notable losers were the utilities, consumer staples and telecommunications sectors, down 0.83%, 0.88% and 0.07%. On the other hand, the losses in limiting the day were gains in technology, real estate and healthcare, at 0.97%, 0.70% and 0.05%, respectively.

The broader financial sector closed the session unchanged, reversing today’s gains after the release of the FOMC statement. The Federal Reserve left interest rates unchanged but hinted at an impending rate hike next month, citing strong economic fundamentals. The 10-year Treasury yields settled at 3.006% and crossed the psychologically important 3% mark for the first time since June.

Technology stocks continued their rebound, up 0.97% as Apple Inc. rose to record highs, gaining 5.88% intraday, nearing a trillion trillion milestone after the tech giant reported robust iPhone sales and higher full-year guidance. The real estate and healthcare sectors also closed higher, at 0.70% and 0.05%, respectively.

On the economic data base, private sector employment added 219,000 jobs in July, compared to projected 178,000 jobs. Meanwhile, the Institute for Supply Management’s ISM production index was below expectations at 58.1% in July against the projected 59.5%. The decrease was mainly due to the lack of skilled labor and higher raw material costs.