On Tuesday, the stock market exhibited some turbulence as the Federal Reserve convened for its latest policy meeting, coinciding with the debut of Instacart on the Nasdaq. The S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) experienced slight declines of approximately 0.2%, while the Dow Jones Industrial Average (^DJI) saw a decrease of about 0.3%.
The Federal Open Market Committee commenced its meeting at 10:30 a.m. Investors were keenly observing the discussion on interest rates, which has been a focal point as the Fed addresses concerns about inflation. Currently, market expectations overwhelmingly point to the Fed maintaining its current interest rates, with a 99% probability according to the CME FedWatch Tool. Investors are particularly interested in Federal Reserve Chair Jerome Powell's remarks regarding the November meeting and any insights from the updated Summary of Economic Projections, often referred to as the "dot plot."
Goldman Sachs chief US economist David Mericle commented on the situation, stating, "Fed officials have signaled that they can afford to proceed carefully at this point and will leave the target range for the funds rate unchanged at 5.25-5.5% at their September meeting." He added, "The immediate question for markets is whether the median dot will continue to project an additional hike this year to 5.5-5.75%, presumably in November. We think that it will, but only by a narrow majority, and in part for the strategic purpose of preserving flexibility."
Meanwhile, investors closely monitored Instacart, which made its stock market debut on the Nasdaq under the ticker CART. The company's stock initially surged by nearly 40% from its IPO price of $30 per share, although it retraced some of those gains by 3 p.m. ET, leaving it up 22%.
Instacart entered the stock market with a valuation of approximately $10 billion. Market experts have suggested that the success of the grocery delivery service's public debut may serve as an indicator of the IPO market's trajectory toward recovery.
In the commodities market, the spotlight remained on rising oil prices, especially as gas prices reached a new high for 2023 on Monday. West Texas Intermediate (CL=F) experienced a slight decline of 0.3%, hovering just above $91 per barrel, while Brent crude (BZ=F) slipped 0.1% to approximately $94 per barrel.
The United Auto Workers (UAW) strike continued into Tuesday, with the UAW announcing that it would extend the strike to additional Stellantis (STLA), GM (GM), and Ford (F) plants if no progress is made in contract negotiations by Friday.
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NIO (NIO) shares saw a drop of more than 12% after the Chinese electric vehicle maker announced plans to offer $1 billion in convertible bonds, following a trend seen among fellow EV competitors Nikola (NKLA) and Fisker (FSR).
Disney (DIS) experienced a decline of over 3% after announcing plans to expand its investment in its Parks, Experiences, and Products division. Over the next decade, Disney intends to invest approximately $60 billion in this category.
Block (SQ) witnessed a decline of more than 2% following the announcement of Alyssa Henry's departure from her role as Square CEO. Jack Dorsey, Block's founder and CEO, will now assume the position of the company's chief executive.
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