U.S. Stocks Turning In Lackluster Performance Ahead Of Fed Minutes

Stocks have shown a lack of direction over the course of the trading day on Tuesday, with the major averages bouncing back and forth across the unchanged line following the weakness seen in the previous session.

Currently, the major averages are posting modest losses. The Dow is down 112.52 points or 0.2 percent at 48,349.41, the Nasdaq is down 38.18 points or 0.2 percent at 23,436.17 and the S&P 500 is down 9.28 points or 0.1 percent at 6,896.46.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting this afternoon.

The minutes of the Fed’s December meeting, when the central bank decided to lower interest rates by another quarter point, may provide further insight about officials’ divergent views about the likelihood of further rate cuts in the new year.

While the Fed is widely expected to leave interest rates unchanged at its next meeting in late January, rates are expected to be at least another quarter point lower by the end of 2026, according to CME Group’s FedWatch Tool.

On the heels of the Christmas holidays last week, some traders may also remain away from their desks ahead of the New Year’s Day holiday on Thursday.

In U.S. economic news, a report released by MNI Indicators showed a significant rebound by its reading on Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer jumped to 43.5 in December after plunging to 36.3 in November. Economists had expected the index to rise to 39.5.

While the Chicago business barometer largely offset the steep drop seen in November, it remained below 50 for the twenty-fifth consecutive month, indicating a continued contraction.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors are showing only modest moves on the day.

Biotechnology stocks have shown a notable move to the downside, however, with the NYSE Arca Biotechnology Index falling by 1.1 percent.

On the other hand, gold stocks are rebounding along with the price of the precious metal, while an increase by the price of crude oil is also contributing to some strength among oil service stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index shed 0.4 percent, while Hong Kong’s Hang Seng Index advanced by 0.9 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.7 percent, the French CAC 40 Index and the German DAX Index are both up by 0.6 percent.

In the bond market, treasuries are giving back ground following the strength seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.0 basis points at 4.136 percent.

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