Wall Street Close: FOMC fears, sluggish data keep bears hopeful

• US equities posted mild losses amid downbeat market sentiment ahead of the key day.
• US Retail Sales eased, PPI grew more than expected in May, suggesting price pressure.
• Treasury yields paused two-day uptrend, WTI jumped to the highest since 2019 but gold eased.
• Oil stocks benefited while retails and technology scripts eased.

US shares ended Tuesday’s North American session on a negative note, though mildly offered, as fears of the Fed’s action join downbeat US data. Also contributing to Wall Street’s losses, marginally, could be the rally in oil prices.

The recent US economics conveyed weaker-than-expected Retail Sales for May, -1.3% versus -0.8% expected. However, the US Producer Price Index (PPI) rose more than 6.3% forecast to 6.6% YoY. With an absence of a major spoiler for the reflation fears, market players remained cautious and stepped back on the equities amid pre-Fed worries.

Additionally, oil prices jumped to the highest since 2019, WTI above $72.00, amid hopes of energy demand battling supply crunch. The latest industry data for the weekly inventories marked higher-than-previous depletion.

Amid these plays, all three Wall Street benchmarks closed negative with the Nasdaq posting the highest losses of 0.71% or 101.29 points to 14,072.89. Dow Jones Industrial Average (DJI) came in second, also snapping a three-day uptrend, with -0.27% or 94.42 points of downside to 34,299.33. Further, S&P 500 dropped 8.56 points or 0.20% to 4,246.59.

It’s worth noting that the US 10-year Treasury yields retreated while marking the first negative daily closing around 1.487% by the end of Tuesday’s North American session.

Energy stocks benefited from the oil price rally whereas tech shares eased on reflation concerns and downbeat data.

Looking forward, market players may witness a choppy start to Wednesday ahead of the Federal Open Market Committee (FOMC) announcement. However, wild moves around the release can’t be ruled.

Read: Federal Reserve Preview: First up, then down? Playbook for trading the Fed