Wall Street struggles for direction

·3-min read

US stock indexes are mixed as financial shares rose and megacap growth stocks slid, with investors bracing for a big interest rate hike by the Federal Reserve this week to tame surging prices.

Seven of the 11 major S&P sectors advanced in early trading with the financial and energy sectors up 0.8 per cent and 1.5 per cent respectively.

Apple Inc, Meta Platforms, Microsoft Corp and Nvidia Corp fell between 0.3 per cent and 0.4 per cent, weighing on the S&P 500 and the Nasdaq indexes.

The US central bank kicks off its two-day policy meeting on Tuesday, with traders seeing a 93.9 per cent chance of a 50 basis points hike.

Focus is squarely on Fed Chair Jerome Powell's press conference on Wednesday for comments on the future path of interest rates and balance sheet reduction.

"The outlook may be more important than what they do. The Fed is in a position where they're behind on inflation so if things don't start to slow down they will have to move more aggressively," said Randy Hare, director of equity research at Huntington National Bank.

Uncertainty around Fed's policy move, mixed earnings from some Big Tech companies, the conflict in Ukraine and pandemic-related lockdowns in China hammered Wall Street in April.

The tech-heavy Nasdaq slumped nearly 13.3 per cent last month, its worst monthly performance since October 2008 as richly valued high growth stocks came under pressure from rising rates.

In early trading, the Dow Jones Industrial Average was down 10.24 points, or 0.03 per cent, at 33,051.26, the S&P 500 was up 5.57 points, or 0.13 per cent, at 4,160.95, and the Nasdaq Composite was down 21.59 points, or 0.17 per cent, at 12,514.43.

A slew of glum quarterly reports also weighed on sentiment.

Paramount Global slid 4.8 per cent as it missed revenue estimates, hurt by weaker TV advertising sales.

Estee Lauder Cos Inc slumped 5.6 per cent after the cosmetics maker cut its full-year profit forecast due to fresh COVID-19 restrictions in China and the Russia-Ukraine crisis.

DuPont de Nemours was flat after the industrial materials maker forecast slower sales volume growth and sequential margin contraction in the current quarter.

Hilton Worldwide Holdings Inc slid 4.6 per cent after the hotel operator forecast a bleak full-year profit.

However, Western Digital Corp jumped 11.9 per cent after activist investor Elliott Investment Management urged the company to separate its Flash business and offered to invest $US1 billion ($A1.4 billion) to facilitate a sale or a spin-off of the business.

Advancing issues outnumbered decliners for a 1.93-to-1 ratio on the NYSE and a 1.26-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 32 new lows while the Nasdaq recorded 15 new highs and 91 new lows.

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