Federal Reserve's Economic Summary Impacts Wall Street Stocks

Wall Street stocks faced a downturn in early trading on Wednesday as the Dow Jones Industrial Average dropped by 0.9 percent to 38,503.12. This decline was influenced by the sustained high US Treasury yields and the market's anticipation of the Federal Reserve's upcoming economic summary release.

The S&P 500 Index and the Nasdaq Composite Index also experienced decreases of 0.8 percent, settling at 5,264.28 and 16,879.80, respectively. The 10-year US Treasury note yield rose to 4.6 percent, signaling expectations of continued high interest rates by the US central bank. Furthermore, the two-year Treasury note yield exceeded 4.9 percent.

Later in the day, the Federal Reserve is set to publish the 'beige book,' a report that provides insights into the current state of the US economy. Market pressure intensified due to a decline in mega-cap stocks, with Nvidia shares falling by approximately 2.1 percent after reports of a potential chip purchase by Elon Musk's xAI. American Airlines witnessed a significant drop of nearly 13 percent after revising its second-quarter sales forecast downwards, while Southwest Airlines shares dipped by 5.5 percent.

ConocoPhillips shares slid by 2.9 percent following the announcement of an all-stock acquisition of Marathon Oil valued at $22.5 billion. In response, Marathon Oil shares rose by around 9.0 percent.

The fluctuations in the stock market, driven by high Treasury yields and market expectations surrounding the Federal Reserve's economic summary, highlight the sensitivity of financial markets to economic indicators and corporate developments. Investors are closely monitoring these factors to gauge the future trajectory of the economy and make informed investment decisions.