The narrative that will be used by the mainstream media to describe Wednesday’s price action is wrong. They will say the reason for the decline was the release of the minutes from the last Federal Reserve Bank meeting. That is wrong for two reasons.
First of all, the S&P 500 index futures declined on Tuesday as the result of comments from Federal Reserve governor, Lael Brainard. Just as the index was peaking off the open yesterday, she remarked that the Fed was willing to act more aggressively to combat inflation. That was confirmed in Wednesday’s release.
As a result, there was a steep decline in the S&P 500 index futures. There was a major follow-through in Wednesday’s premarket trading. The index was over 40 handles lower when trading commenced for the regular session (4477.75 vs. 4520.25).
The other reason is the index closed higher than its last print of the 2:00 PM bar, which was just ahead of the announcement at 4471. With all the wild gyrations that followed, the index ended the session above that level. With a closing print of 4475.75, the index was lower by 44.50 handles.
The biggest gainer of the top components was UnitedHealth Group Inc. (NYSE: UNH) for the second day in a row. The issue blasted to a new all-time and all-time closing high by gaining $13.99 or 2.70% to close at $531.75.
That was nearly 4% better than the cash index’s decline of 0.97%.
Nvidia Corp (NASDAQ: NVDA) was the biggest loser of the top components for the second day in a row. For the session, the issue declined by $15.24 or 5.9% to close at $244.07.
PreMarket Prep Stock Of Day: Rivan Automotive Inc. (NASDAQ: RIVN)
It was “sell the news” after the confirmation of the production of vehicles in 2022. Read more on RIVN here.
