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Shares were shaken before the Fed minutes

U.S. shares will be combed with details of a rise in interest rates before the release of the latest Federal Reserve policy meeting minutes.

Shortly after opening lower, stock indices turned green at the start of trading. Earlier in the day, the S&P 500 was up 0.1% on Tuesday after a broad market index fell 0.8%. The Nasdaq Composite Index rose 0.4% in return for a significant return on technology stock sales the previous day.

The Dow Jones Industrial Average fell 0.2% or 59 points.

Consumer discretionary stocks followed the S&P 500 profit, rising by about 2.4% in midday trading. Several retail companies, including Nordstrom and Express, raised their expectations for 2022, while others, such as Dick’s Sporting Goods, indicated that the business was not deteriorating. The bright outlook welcomed investors to last week’s change when Target and Walmart gave disappointing results.

“Some investors were expecting a retail Armageddon,” said Matt Peron, research director at Janus Henderson Investors. “The story was that it could have been another week. Now the market is gaining momentum around the consumer sector.”

Shares have had an uneven start to the week, fueled by concerns about the Fed tightening monetary policy, which could lead to a fight against high inflation and a slowdown in growth. The S&P 500 fell nearly 18% from its last January record and briefly fell into bear market territory last Friday before matching losses.

“It’s been really volatile, at least. That has to do with the issue of recession, whether that will come or not. That’s what the market is pushing and pulling, ”said Fahad Kamal Kleinwort Hambros, chief investment officer.

Earlier this month, the minutes of the Federal Reserve meeting will be released at 2 p.m. US demand for durable goods rose 0.4% in April, at a slower pace than economists expected.

Shares have fallen in 2022 as investors have adjusted to rising consumer prices and the Fed’s response. As rates rise and the economy’s outlook declines, the shares of many companies have become increasingly expensive, at least in terms of their profits, said Sean O’Hara, president of Pacer Distributors ETFs.

“When one goes up,” Mr. O’Hara said, “the other has to go down.”

The benchmark 10-year Treasury bill yield fell slightly on Tuesday from 2,760% to 2,758%. It has dropped four times in the last five trading sessions. Yields fall as prices rise.

“The market is finally putting a price on the slowdown that will come from the Fed’s tightening. It also predicts that inflation will slow to much more sensible levels in 2023,” said Antonio Cavarero, head of investment in Generali Insurance Asset Management.

Government debt is working well in times of slower economic growth, which has led to a stabilization of the bond market in recent days.

When markets are declining, some investors are trying to make a profit using a strategy called buying. Gunjan Banerji of the WSJ tells us why this approach is dangerous in today’s volatile market, although it can be tempting. Illustration: Reshad Malekzai

Oil prices rose with a benchmark global Brent crude rising 0.6% to sell at $ 111.40 a barrel. U.S. Secretary of State Biden has said the Biden administration has not ruled out a ban on oil exports to reduce domestic fuel prices, Reuters reported.

Grain prices continued to fall for a week compared to recent highs as rain improved growing conditions on the Great Plains and a Russian official said the country was open to easing the blockade of Ukrainian ports by removing sanctions on food exports. Chicago’s soft red winter wheat futures fell 2% to $ 11.32, while the hard red wheat wheat used for bread fell to $ 12.18. The future of corn and soybeans also declined.

In individual shares, Snap shares rose 10%. Shares of Snapchat fell 43 percent after a earnings warning on Tuesday, citing macroeconomic conditions that have deteriorated faster and more than expected.

“It’s clear that the valuation of technology has been revalued. It’s impossible to know how far it goes, but some of it is quality business and significantly cheaper than what has been traded lately,” said Kamal. “If you’re a long-term investor, that’s going to be interesting.”

Retailer Nordstrom rose 11% after rising its year-over-year revenue growth policy. Express clothing company rose 7.8% after posting a tighter-than-expected loss and rising sales guidance. Dick’s rose 9.1%.

House builder Toll Brothers rose 5.8% after exceeding analysts ’expectations of revenue and earnings.

The technology-based Nasdaq Composite closed at about 2.4% on Tuesday.


Photo:

justin lane / Shutterstock

Abroad, the Stoxx Europe 600 pan-continental rose 0.6%.

In Asia, the main references were confused. The Shanghai Composite Index rose 1.2% and the Hong Kong Hang Seng rose 0.3%. The Japanese Nikkei fell 0.5% 0.3%.

—Ryan Dezember contributed to this article.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and to Justin Baer at justin.baer@wsj.com

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Shares were shaken before the Fed minutes

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