U.S. equities and stock exchange traded funds slipped Wednesday ahead of the Federal Reserve announcement as the materials sector dragged on markets and falling Apple (NasdaqGS: AAPL) weighed on the technology sector.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.30% lower Wednesday.
The materials sector was among the worst performing areas of the market, falling 1.2% in the S&P 500, on a plunge in copper prices due to a double whammy of rising inventories and concerns over slowing Chinese demand, the Wall Street Journal reports.
Apple shares also weakened and dragged on major indices, with the Nasdaq Composite pulling back form recent records after the company revealed an increase in profit but weak demand for its iPhone. Company shares surged to records earlier this year on hopes that policy changes, like corporate tax cuts and repatriation holidays, would bolster growth in technology space.
“There’s quite a lot of optimism built into tech – it was slightly less positive than people were hoping for,” John Stopford, head of multiasset income at Investec Asset Management, told the WSJ.
Strong corporate earnings have so far raised first-quarter profit growth projections for the S&P 500 to 14.2% as of Wednesday, compared to 10.4% growth two weeks back, according to Thomson Reuters. The upbeat results have helped U.S. equities maintain their record run and extended the bull market into its ninth year.
“We’re about 70 percent through the earnings season and despite some isolated incidents, overall the season has been great,” Randy Frederick, vice president of trading and derivatives for Charles Schwab, told Reuters. “And that’s one of the reasons why the indexes are hovering near record levels.”
Investors were also waiting on the Fed to release its latest monetary policy decision later Wednesday, with the majority of market watchers anticipating no changes to benchmark interest rates. However, some were hoping for some hints as to the Fed’s future policy, notably any signals for changes in its next June meeting
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