Wall Street ended down slightly, with bank stocks declining as prospects of a US interest rate cut rose and energy shares tumbled along with oil prices. The S&P 500 energy index slid 1.4 per cent on Wednesday, the most among the 11 S&P sectors, as demand worries drove US crude prices down four per cent. The day’s losses made energy the worst-performing S&P 500 sector for the year to date.
A report from the Labor Department showed US consumer prices rose 0.1 per cent in May, in line with expectations of economists polled by Reuters, pointing to moderate inflation. This backed the case for a rate cut by the Federal Reserve. Banking stocks, which tend to benefit from higher interest rates, dropped 1.4 per cent. The broader financial sector fell one per cent.
Still, hopes that the Fed will act to counter a slowing global economy due to the escalating trade war with China have spurred a rally in stocks this month. The S&P 500 index is up 4.6 per cent so far in June. Fed policymakers will meet on June 18-19, and markets have already priced in at least two rate cuts by the end of 2019. Fed fund futures imply around an 80 per cent chance of an easing in rates as soon as July.
The Dow Jones Industrial Average fell 43.68 points, or 0.17 per cent, to 26,004.83, the S&P 500 lost 5.88 points, or 0.2 per cent, to 2879.84 and the Nasdaq Composite dropped 29.85 points, or 0.38 per cent, to 7792.72.Morning-Market-Note-Thursday-13th-June