Stock indexes closed lower as the debt-ceiling bill went to a vote in the House of Representatives late Wednesday. The Dow Jones Industrial Average rose from session lows but indexes slid in the final 15 minutes, leaving the Dow 0.4% lower at the closing bell.
The Federal Reserve's Beige Book survey of regional activity found that, overall, economic conditions showed little change in April and early May. Consumer spending increased slightly, with small increases in employment and prices in most districts.
Elsewhere, Fed Gov. Philip Jefferson indicated that a rate pause may not mean the end of the rate hike cycle. A hawkish pause "at a coming meeting would allow the (Federal Open Market) Committee to see more data before making decisions about the extent of additional policy firming."
The pause could be timely as the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency work toward adopting new rules to standardize capital requirements at the largest banks.
The CME FedWatch Tool saw chances of a quarter-point rate hike to a 5.25%-5.5% target range in June drop to 27.5%.
Similar to the action in the Dow Jones industrials, the S&P 500 and the Nasdaq closed off session lows despite the late selling, ending 0.6% lower.
Volume on the NYSE and on the Nasdaq was lower compared with the same time on Tuesday.
The small-cap Russell 2000 ended 1% lower Wednesday. The Innovator IBD 50 ETF fell 0.3% after being down more than 1%.
U.S. crude oil continued its fall and traded at $68.79 a barrel. The yield on the benchmark 10-year Treasury note fell 6 basis points to 3.63%.
Stocks Moving Today
Shares of Tesla closed above the 200-day moving average as they form a base with a 207.89 buy point. On Tuesday, the stock rose as CEO Elon Musk met the head of battery maker Contemporary Amperex Technology (CATL) in China, the largest EV market.
CATL specializes in lithium iron phosphate (LFP) batteries, sidestepping its expensive cobalt counterpart. A new battery plant with a capacity of 10,000 megapacks per year is also planned. Also, an LFP plant in the U.S. is also in the plans, with possible credits coming from the Inflation Reduction Act.
Tesla's Shanghai factory made over half of total Tesla cars globally in 2022. According to Wedbush analyst Dan Ives, "gaining market share against domestic competitors is right now front and center for the Tesla story."
Tesla faces competition in China from Warren Buffett-backed EV company BYD, Nio and Xpeng. Ives has an outperform rating on Tesla with a 215 price target.
Elsewhere, shares of computer and printer giant HP fell below the 50-day line as slowing PC demand hurt sales. The stock slid 6% after the company's earnings report.
Advance Auto Parts plummeted 35% after cutting its outlook on rising costs. The auto parts retailer also cut its dividend and missed profit views.
Dow Jones Stock Falls After Analyst Upgrade
Shares of Dow Jones component Chevron fell 1.7% despite an upgrade from JPMorgan analysts to neutral from underweight with a 170 price target. The stock remains well below its 50-day line as the energy sector slumps.
Broadcom pared some of Tuesday's losses ahead of earnings Thursday. Shares have reached a 20% profit target from the 648.60 entry.
GameStop, which will also announce earnings Thursday, fell more than 2% but remains in a cup base with a 27.10 entry.
C3.ai, which got some airplay in Wednesday's IBD Live show, fell nearly 9% after a 33% spike on Tuesday. Earnings are due after the close today.
The Job Openings and Labor Turnover Survey (JOLTS) showed 10.103 million job openings in April, well above March's 9.745 million job openings and Econoday's estimate of 9.350 million. Hiring was little changed while separations decreased.
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