The Dow Jones Industrial Average jumped almost 400 points ahead of the next Fed meeting. First Republic (FRC) stock plummeted despite reports the troubled bank is seeking the aid of JPMorgan Chase (JPM) as it battles to stay afloat. The Donald Trump SPAC Digital World Acquisition (DWAC) rocketed amid more Stormy Daniels legal drama.
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There was some bullish action even though the stock market is still gripped by a correction. Wheaton Precious Metals (WPM) attempted a weak breakout, while Royal Gold (RGLD) joined Leaderboard amid an encouraging move.
The Federal Open Market Committee Meeting, led by Fed Chair Jerome Powell on Tuesday and Wednesday, looks to be key.
“U.S. stocks are wavering as risk aversion won’t be going away until markets are confident that the Fed is done with their rate hiking campaign,” Oanda senior market analyst Edward Moya said in a note to clients. The banking system still doesn’t have any confidence as Wall Street tries to send yields sharply lower, he added.
It looks like “credit conditions will continue to tighten while monetary policy conditions are expected to loosen as the economy heads to a recession,” Moya said.
Treasury yields rose as the yield curve continued to stay inverted. The 10-year yield surged 10 basis points to 3.5% while the two-year yield spiked 12 basis points to 3.97%.
Nasdaq Lags As Small Caps Jump
The Nasdaq lagged the other major indexes after last week’s outperformance. It closed up 0.4%, near highs for the day. Enphase Energy (ENPH) impressed with a gain of 4.8%.
The benchmark S&P 500 rose 0.9%. However, it failed to decisively move above the 200-day moving average. NRG Energy (NRG) was a strong performer here, rising 6.8% to end back above the 50-day moving average.
The S&P 500 sectors were all positive. Energy, materials and industrials were the top performers. Consumer discretionary and technology made the slimmest gains.
Solid action among financials bolstered small caps, with the Russell 2000 rising 1.1%. Growth stocks reversed higher, with the Innovator IBD 50 ETF (FFTY) making a modest 0.4%…
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