By Lewis Krauskopf, Bansari Mayur Kamdar and Johann M Cherian
(Reuters) – Wall Street’s main indexes were slightly lower on Wednesday following tepid economic data from the U.S. and China, while stocks held losses after the release of minutes from the Federal Reserve’s latest meeting.
Minutes showed a united Fed agreed to hold interest rates steady at the June meeting as a way to buy time and assess whether further rate hikes would be needed.
Stocks maintained modest declines after the mid-afternoon release of the anticipated minutes, with investors largely expecting the central bank to raise rates at its next meeting later this month.
The Dow Jones Industrial Average fell 126.07 points, or 0.37%, to 34,292.4, the S&P 500 lost 7.71 points, or 0.17%, to 4,447.88 and the Nasdaq Composite dropped 16.50 points, or 0.12%, to 13,800.27.
New orders for U.S.-made goods increased less than expected in May, government data showed, fanning fears of an economic slowdown. Meanwhile, China’s services activity expanded at the slowest pace in five months in June, according to a private-sector survey.
More economic data, including the monthly U.S. jobs report, is due later this week that could help determine the Fed’s rate trajectory.
“If we continue to see a cooling of inflation, there may not be any further rate hikes, but nothing to that end was disclosed in the Fed minutes,” said Michael James, managing director of equity trading at Wedbush Securities.
“We’ll have a much better sense after we get another major data point on Friday with the jobs report and that inflation data next week.”
Chip stocks fell after China said it would control exports of some metals widely used in the semiconductor industry as tensions between Beijing and Washington rise over access to high-tech microchips.
The Philadelphia SE Semiconductor Index lost 1.7%, with Intel off 2.5% and Texas Instruments down 1.3%.
Shares of Meta Platforms rose 3.5% ahead of the expected release of its Twitter-rival app, Threads, on Thursday.
Megacap stocks such as Meta have led the gains so far this year for major equity indexes, including the biggest first-half increase for the Nasdaq Composite in 40 years.
“We could see the largest stocks pull back, but the average stock catch up,” said Jack Ablin, chief investment officer at Cresset Capital. “We are looking for somewhat of a convergence.”
(Reporting by Lewis Krauskopf and Sinead Carew in New York, Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Marguerita Choy and Vinay Dwivedi)
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