Wall Street Close: Another day in the red with eyes on FOMC minutes

Wall Street benchmarks dropped for the second consecutive day amid mixed signals and extended uncertainty over Fed’s next move. Technology shares remain as the bear’s favorites while retails also couldn’t cheer upbeat results from giants. US housing data came in a weaker-than-expected and dimmed global policymakers’ battle to renew market sentiment towards risk-on.

Amid these plays, Dow Jones Industrial Average (DJIA) dropped 0.78% or 267.13 points to mark its second consecutive daily loss by closing around 34,060.66. Further, the S&P 500 drops the most among the key benchmarks, down 35.45 points or 0.85% to end the day near 4,127.84. Additionally, the Nasdaq slipped 0.56% or 75.41 points of loss, while finishing the day’s trading at 13,303.64.

Although downbeat US Housing Starts and Building Permits joined the global movement to ease out vaccine shortage initially favored the risk sentiment, cautious mood ahead of Wednesday’s US Federal Open Market Committee (FOMC) meeting minutes weighed on the mood afterward. Growing fears of the coronavirus (COVID-19) in Asia and the Indian strain on the covid in the West exert additional downside pressure on the market’s mood.

It should, however, be noted that the governments in Japan, US and China rolled up their sleeves to pump chipmaking activities and the White House favor for Electric Vehicles (EV) couldn’t please the bulls, not to forget better than forecast results from Home Depot and Walmart.

A Bank of America (BofA) survey suggesting Fund managers turned overweight on UK stocks for the first time in seven years and cut exposure to tech stocks as rising inflation leaves growth stocks vulnerable to pullbacks weighed on market sentiment.

Moving on, FOMC minutes remain as the key event for Wednesday where markets will parse the central bank’s economic view and future guide considering the latest jump in inflation. Given the policymakers’ rejection of adjustments, coupled with the latest favor for technology and EV companies, US equities may snap a two-day downtrend. Though, inflation woes can keep traders cautious.