The Nasdaq 100 Index shook off worries over the health of the global economy after weak services-industry data from China sent European and Asian markets lower.
The tech benchmark edged higher with mega-caps Meta Platforms and Nvidia driving gains as trading resumed after the Independence Day holiday.
The S&P 500 benchmark slipped.
Among Wednesday’s notable movers, United Parcel Service dropped 2.4% as employees moved closer to a strike over pay while cryptocurrency exchange Coinbase Global fell after a downgrade.
The yield on policy-sensitive two-year Treasuries drifted about three basis points lower to 4.91%, while the 10-year yield was at 3.87%.
That inverted yield curve is often read as a sign of a coming economic slump.
“I am the most bearish I have ever been on the economy without being in a recession, and it’s because of the yield curve, the contraction of money and QT at the same time they are hiking rates,” Ed Hyman, founder and chairman of Evercore ISI, said on Bloomberg Television.
China’s sputtering recovery and the uncertain outlook for the Federal Reserve’s rate-hike cycle have tempered demand for global equities after a stellar first-half rally, driven mostly by mega-cap tech stocks.
Later Wednesday, traders will scrutinize the minutes of the Fed’s last policy meeting, which left Wall Street perplexed as officials paused their rate-hike cycle after 10 consecutive moves, but forecast two additional increases this year, which could further weigh on economic growth and corporate profits.
“It’s too early to say how deep the recession that is to come will be, but clearly a slowdown is coming,” said Fabiana Fedeli, chief investment officer for equities and multi assets at M&G.
“It’s too early to throw in the towel on risk assets whether in equities or credit. But at the same time you have to stay pretty high on the quality pole.”
With more interest-rate hikes anticipated from the Fed and the ECB in July, an aggregate gauge of borrowing costs calculated by Bloomberg Economics now shows a peak of 6.25% this quarter, up from 6% foreseen three months ago.
The offshore yuan reversed an advance after the Caixin China services purchasing managers’ index was weaker than expected.
The yuan’s drop was also notable because it came despite the central bank earlier maintaining its support for the currency in its daily fix.
Elsewhere, crude futures approached $72 a barrel after Saudi Arabian and Russian output cuts earlier this week.
Traders are waiting for commentary from the Saudi energy minister. Gold edged higher while a gauge of the dollar steadied.
