Investor Sentiment Falls Further After Fed Minutes, Dow Tumbles 200 Points

The CNN Money Fear and Greed index showed another decline in the overall market sentiment, but the index remained in the “Greed” zone on Wednesday.

U.S. stocks settled lower on Wednesday following the release of Fed minutes, with the Dow Jones index falling over 200 points during the session.

The minutes from the latest Federal Open Market Committee meeting released Wednesday reveal increased uncertainty about the swift decline of inflation toward the 2% target, with the majority of board members indicating the need to keep restrictive interest rates for an extended period.

The TJX Companies, Inc. TJX reported better-than-expected first-quarter financial results on Wednesday. Williams-Sonoma, Inc WSM reported upbeat first-quarter FY24 earnings. Target Corp TGT reported weaker-than-expected first-quarter earnings.

On the economic data front, U.S. existing home sales fell 1.9% month-over-month to an annualized rate of 4.14 million units in April versus a revised 4.22 million in the prior month.

Most sectors on the S&P 500 closed on a negative note, with utilities, energy, and materials stocks recording the biggest losses on Wednesday. However, healthcare and industrial stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 202 points to 39,671.04 on Wednesday. The S&P 500 fell 0.27% at 5,307.01, while the Nasdaq Composite slipped 0.18% at 16,801.54 during Wednesday's session.

Investors are awaiting earnings results from Medtronic plc MDT, Ross Stores, Inc. ROST, and BJ’s Wholesale Club Holdings, Inc. BJ today.

At a current reading of 58.8, the index remained in the “Greed” zone on Wednesday, versus a prior reading of 60.6.

What is the CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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