Wall Street's major averages were treading water Tuesday with minor gains as the pending decision by the Federal Open Market Committee drove investors to the sidelines. The Dow Jones Industrial Average is trading only fractionally higher as gains in the consumer sector were offset by heavy losses for telecoms as a result of the $85 billion merger between AT&T ( T ) and Time Warner ( TWX ).
With all eyes on the Fed, Wall Street paid little attention to hotter-than-expected inflation data and simmering trade tensions between the US and China. The producer price index increased by 0.5% in May and jumped to 3.1% year-over-year, well above the consensus estimates. Excluding the volatile food and fuel component, wholesale prices gained 0.3% versus +0.2% estimates, driving up the year-over-year index to 2.4%. Both will likely factor into the Fed's decision to hike rates Wednesday, and could influence the interest rate trajectory for the remainder of the year.
On the trade front, shares of component stocks Boeing ( BA ) and Caterpillar ( CAT ) were under pressure amid reports that President Donald Trump was expected to impose additional tariffs on Chinese goods, along with Trump's characterization of China's proposed $80 billion purchase of US agriculture products as "insufficient." Additionally, the deal between China's ZTE and its American suppliers is at risk of a Senate vote to block the agreement.
Oil futures lunged higher mid-morning on recent industry data showing a significant decline in crude and gasoline supply. The data offset early pressure tied to reports of possible production increases in Saudi Arabia and Russia and sent brent crude futures almost a dollar a barrel higher.
Ahead of the 2pm ET announcement by the Fed, the dollar is lower against most of the majors except the Japanese yen; gold is higher; and Treasury yields are mixed with shorter-dated maturities slightly cheaper, the 10-year note unchanged and the benchmark 30-year bond trading fractionally richer at a 3.085% yield.
Crude oil was up $0.18 to $66.54 per barrel. Natural gas was up $0.04 to $2.98 per 1 million BTU. Gold was up $2.80 to $1,302.20 an ounce, while silver was up $0.12 to $17.01 an ounce. Copper was up $0.01 to $3.25 per pound.
Among energy ETFs, the United States Oil Fund was up 0.52% to $13.47 with the United States Natural Gas Fund was up 0.88% to $24.00. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 0.08% to 22.46 while SPDR Gold Shares were up 0.18% to $123.04. The iShares Silver Trust was up 0.72% to $15.98.
Here's where the markets stand at mid-day:
NYSE Composite Index was down 10.42 points (-0.08%) to 12,829.09
Dow Jones Industrial Index was down 12.27 points (0.05%) at 25,308.46
S&P 500 was up 0.67 points (+0.01%) to 2,787.31
Nasdaq Composite Index was up 28.22 points (+0.37%) to 7,732.00
FTSE 100 was down 0.10 points (-0.00%) to 7,703.71
DAX was up 48.28 points (+0.38%) to 12,890.58
CAC 40 was down 0.64 points (-0.01%) to 5,452.73
Nikkei 225 was up 88.03 points (+0.38%) to 22,966.38
Hang Seng Index was down 377.91 points (-1.22%) to 30,725.15
Shanghai China Composite Index was down 30.01 points (-0.97%) to 3,049.80
NYSE SECTOR INDICES
NYSE Energy Sector Index was down 23.51 points (-0.19%) to 12,056.82
NYSE Financial Sector Index was down 14.89 points (-0.20%) to 8,030.42
NYSE Healthcare Sector Index was up 38.93 points (+0.27%) to 14,723.34
(+) ENPH (+33.33%) Sells microinverter business to SunPower
(+) PVTL (+23.57%) Reported upbeat Q1 results
(+) SEII (+22.25%) Subsidiary entered into licensing agreement with Ecrent Capital to establish website platform in North Korea
(-) FLKS (-68.18%) Announced plans to end phase 2 trial of ALS and CMT treatments, will cut workforce by 60%
(-) HRB (-17.80%) Plans to close 400 offices
(-) USAC (-8.72%) Prices secondary offering of 5 million common units
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