Wall Street Close: FOMC Minutes, cryptos back bears, Nasdaq rebound ignored

  • All three benchmarks drop for third consecutive day.
  • Fed’s Bulls, FOMC Minutes signal policymakers can consider talking tapering.
  • Accelerating global drive to increase chipmaking, US push for EVs favored technology shares.
  • Cryptocurrencies portray another wild day as Musk battles the bears.

Wednesday becomes one more day when Wall Street bears keep the reins even as the technology shares consolidate recent losses. The reason could be traced to the downbeat signals from the Fed teasing tapering talks and a wild ride of the cryptocurrencies.

Despite portraying economic optimism, the Federal Open Market Committee (FOMC) Meeting Minutes and comments from St. Louis Fed President James Bullard signaled that the board members are concerned about an exit from easy money. This propelled the US Treasury bond yields the most in one week, also fueling the US dollar index (DXY) bounce off the late February lows.

Also on negative for the sentiment was a wild ride of cryptocurrencies that initially drowned Bitcoin and Ethereum below the key levels before pulling them to minor-loss levels, thanks to tweets of Tesla-founder Elon Musk.

Against this backdrop, Dow Jones Industrial Average (DJIA) dropped 0.48% or 237.20 points to mark its third consecutive daily loss by closing around 33,900. S&P 500 also followed the suit and declined for the third day, down 12.15 points or 0.29% to end the day near 4,115.

It should, however, be noted that the US, China and Japan are on their way to boost chipmaking while America unveiled the economic benefits of using Elective Vehicles (EV), via government relief, to help Nasdaq overcome most of the early-day losses. Even so, the benchmark couldn’t buck the downtrend while closing with a 0.03% loss, or 3.90 points, around 13,300.

Elsewhere, the market gauge of volatility, VIX, jumped to 22.0, signaling active trading hours while oil prices couldn’t bear the burden of the expected increase in supply amid confusion over the Fed’s next move.

Looking forward, Weekly Jobless and Fedspeak remain as the key catalysts to watch for fresh impulse. Also, any surprises concerning the US monetary policy and/or government stimulus shouldn’t be undermined as well.

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