The market struggled to hold onto its gains from a late rally in the previous session, which resulted in flat U.S. stocks on Wednesday.
About 53 points, or 0.2 percent, were lost by the Dow Jones Industrial Average. Little changed in the S&P 500 and Nasdaq Composite.
Oil prices continued their recent decline, which led to some of the worst performances among energy stocks. Exxon and Chevron each saw a 4% decline in share price.
On Wednesday, it appeared as though investors were returning to defensive stocks. Procter & Gamble and Walmart were among the Dow’s top gainers, each posting gains of about 1%.
The actions on Wednesday come after an intraday reversal in the prior session. The S&P 500 recovered from a 2 percent loss during Tuesday’s final trading hours to end the day up 0.2 percent. The heavily tech-focused Nasdaq Composite performed better, rising 1.75 percent. The Dow dropped 129 points, but at one point was down more than 700 points.
After the benchmark 10-year U.S. Treasury yield dropped below the 2-year yield, investors kept questioning whether the economy was about to enter a recession. In the past, the so-called yield curve inversion has served as a warning sign that the economy is about to enter or has already entered a recession.
According to some Wall Street analysts, a recession might be minor. Credit Suisse reduced its year-end S&P 500 target on Tuesday to reflect the impact of higher capital costs on stock valuations, saying it believes the United States will avoid a recession.
“Growth and inflation are currently engaged in a game of chicken as they advance toward one another to see who will flinch first. Both of them will eventually collapse, but which one collapses first will have the biggest impact on the way forward “said Chris Osmond, Centura Wealth Advisory’s chief investment officer.
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According to Cameron Dawson, chief investment officer at NewEdge Wealth, the market may be approaching its bottom.
Do we have a drawdown that appears to be in that 30 percent range, which is typical for recessions, or something that appears to be closer to down 50 percent, as we did in the early 2000s and 2008, when we had two debt crises? she asked. “There is no apparent debt crisis. Because it returns us to the pre-Covid highs, we believe we could start to find some value at about 3,400 to 2,500.”
Wednesday doesn’t have any significant earnings reports planned, but there will be a plethora of economic reports released, including the Federal Reserve’s June meeting minutes in the afternoon.
Despite falling rates, mortgage demand decreased week over week, according to the Mortgage Bankers Association. However, it did reveal a slight slowdown in growth. The Institute for Supply Management services PMI data came in better than anticipated. More than 11 million job openings were reported, which was higher than anticipated.
