Day Traders Diary

8/16/23

The major averages drifted lower finishing in the red after the Federal Reserve's July meeting notes showed the potential for higher rates and more rate hikes. The Dow Jones Industrial Average traded down 180 points, or 0.52%. The broader market S&P 500 index dropped 33 points or 0.76% while the Nasdaq Composite declined 156 points or 1.15%.

In the central bank's July meeting minutes, officials said additional tightening may be necessary to bring down inflation.

"With inflation still well above the Committee's longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy," the meeting summary stated.

The federal funds rate is currently in a range between 5.25% to 5.5%, the highest level in more than 22 years.

The moves follow a losing session on Wall Street, with all three of the major indexes finishing more than 1% lower on Tuesday. With the losses, the Dow snapped a three-day winning streak. Meanwhile, the S&P 500 ended the session below its 50-day moving average, which could signal a downturn ahead.

On the earnings front, tax preparer H&R Block and Mediterranean food chain Cava are both up over 4% following better than expected quarterly reports. TJX and Target are higher by 4% and 3% respectively as back to school sales revved up.

With just over half of August left, the three major indexes are on pace to see a losing month. The Nasdaq Composite and S&P 500 are on track to end 5% and 3.3% lower, respectively, while the Dow is slated to drop 1.7%.