The major averages trade in the red at midday after surrendering their modest gains in recent trade. The market slid from highs to lows after Fed Chairman Powell indicated that the FOMC could call for bigger hikes than 25 bps.
The recent slip pressured the S&P 500 (-0.4%) away from its 200-day moving average (4472) after it rallied to that mark during last week’s rebound. Five sectors display midday gains with energy (+3.4%), materials (+0.9%), and utilities (+0.6%) showing relative strength while influential sectors like technology (-0.6%), consumer discretionary (-0.7%), and communication services (-0.8%) trade lower.
The energy sector is building on last week’s rebound with assistance from crude oil amid continued speculation that the EU could ban imports of Russian oil. WTI crude is up $6.04, or 5.8%, at $110.74/bbl while five components of the energy sector have reached fresh 52-week highs, including EOG Resources ( EOG 121.69, +5.89, +5.1%).
Like energy, the materials sector is also being boosted by supply concerns after Australia banned aluminum exports to Russia. Nucor ( NUE 143.97, +7.81, +5.7%) is up nearly 6.0% while the Vaneck Steel ETF ( SLX 66.92, +2.17, +3.4%) is nearing last year’s high ($68.22). Fertilizer names also display big gains with Mosaic ( MOS 67.16, +5.08, +8.2%) rising to its best level since 2011 while CF Industries ( CF 100.81, +5.56, +5.8%) has hit a fresh record high.
On the downside, top-weighted technology is being pressured by losses in most of its components, including top listings like, Microsoft ( MSFT 297.59, -2.83, -0.9%), Visa ( V 216.93, -2.18, -1.0%), and Broadcom ( AVGO 595.45, -10.86, -1.8%). Chipmakers trade a bit behind the sector with the PHLX Semiconductor Index falling 0.6%.
In the discretionary sector, relative strength in Amazon ( AMZN 3232.01, +7.00, +0.2%) and Tesla ( TSLA 919.33, +13.94, +1.5%) is preventing the sector from showing a wider loss as all of its remaining components trade lower.
Treasuries sit on their lows with the 10-yr yield rising 13 bps to 2.28%, its highest level since May 2019.