Amid decreased inflation fears, the S&P 500 (SPX-INDEX) regained strength last week and broke the two-week losing streak. However, the market opened this week on a weaker note and declined in the first two trading days. On February 22, the S&P 500 traded higher for most of the day, reversed at the end of the day, and closed lower. On Wednesday, all 11 major S&P 500 sectors closed the day lower. The market decline was led by weakness in the telecom services, energy, and real estate sectors.
The market sentiment was mixed at the beginning of this week following a rebound last week. On Wednesday, the market moved higher in the opening hours due to the release of stronger-than-expected economic data. According to Markit, the US manufacturing purchasing managers’ index in February was 55.9—better than the forecast of 55.4. However, the market lost strength after the Fed released January’s meeting minutes on Wednesday. With low unemployment and inflation moving towards the Fed’s target of 2%, Fed officials see the need for more gradual increases in the interest rate. The market is looking forward to the release of initial jobless claims data. The data are scheduled to release at 8:30 AM EST on February 22.
The CBOE Volatility Index (or VIX) measures uncertainty in the market. It fell 2.8% to 20.02 on February 21. The index is measured on a scale of one to 100 with 20 as the historical average. The VIX is also called the “fear index.” Usually, VIX has an inverse relationship with stocks and rises when the S&P 500 falls.
NASDAQ and Dow
The NASDAQ Composite Index (COMP-INDEX) and the Dow Jones Industrial Average (DJIA-INDEX) opened the day higher and traded with strength. However, they lost strength in the closing hours because the Fed’s meeting minutes sparked interest rate hike fears. The NASDAQ Composite Index fell 0.22% and closed the day at 7,218.23. The Dow Jones Industrial Average declined 0.67% and closed at 24,797.78.
Next, we’ll discuss how the S&P 500’s top gainers performed on February 21.