Wall Street performed lower on Wednesday, guided by falls in technology as well as defensive stocks as investors tried to determine the chances of a rate hike within the next few months. The market is solely focused on Federal Reserve Chair Janet Yellen’s speech at Jackson Hole, Wyoming at the end of the week where she is likely going to give a clear answer on plans for the future with monetary policies. Newer hawkish comments from certain Fed officials, as well as Vice Chairman Stanley Fischer, have increased predictions that Yellen might hint towards a hike in September.
All ten major S&P 500 indexes were trading lower. The financials sector .SPSY, which seeks to benefit from higher rates, saw the smallest loss of 0.07 percent. The big falls were utilities .SPLRCU, consumer staples .SPLRCS and telecom services .SPLRCL, defensive sectors that have driven Wall Street’s rebound during 2016 as predictions of a rate hike become slimmer and slimmer. As Wall Street is trading near records levels, volumes have decreased below average in the last couple of sessions as the U.S. earnings season winds down and as traders avoid major risks ahead of a firmer grip on the future of monetary policy.
“Caution is certainly warranted before Yellen’s speech. We know its going to move the market, we just don’t know which way,” Matthew Tuttle, chief investment officer of Tuttle Tactical Management in Connecticut, said. “The biggest risk right now is that she comes out and makes it look like September is squarely on the table.”
At 11:06 a.m. ET the Dow Jones Industrial Average .DJI had decreased 42.35 points, or 0.23 percent, to 18,504.95.The S&P 500 .SPX fell 4.62 points, or 0.21 percent, to 2,182.28.The Nasdaq Composite .IXIC was down 5.94 points, or 0.11 percent, at 5,254.14.