US OPEN: Wall Street opens slightly lower ahead of Fed decision

• Wall Street opens slightly lower ahead of Fed decision
• US2000 tries to break above 1,900 pts resistance zone
• Fed looks likely to keep rates unchanged today

Wall Street indices launched today's trading lower with Dow Jones (US30) dropping 0.5%, S&P 500 (US500) trading flat and Nasdaq-100 (US100) declining 0.1%. Softer-than-expected PPI release failed to trigger any major move on the stock markets. This is most likely because Fed is widely expected to leave rates unchanged given recent CPI data, and today's PPI print only confirms it further. Money markets price just a 7% chance of 25 bp rate hike today.

Source: xStation5

US small-cap index Russell 2000 (US2000) outperformed other Wall Street indices yesterday and finished trading within the resistance zone in the 1,900 pts area. Index is attempting to make a move above this resistance zone at the beginning of today's trading. Should bulls manage to deliver a decisive upside breakout, the index may target 1,940 pts resistance next. While it currently looks like such a break will be delivered, one should keep in mind that with a big risk event ahead - FOMC decision. A rate hike today is unlikely but as tech shares and small-cap tend to be more reactive to monetary policy decisions, narrative will be watched closely. 

Company News

MicroVision (MVIS.US) experiences a double-digit plunge today. Company announced yesterday after the close of the Wall Street session that it plans to offer new shares worth $75 million. Proceeds from the offering will be used for general corporate purposes.

News surfaced today saying that Safran SA (SAF.US), French aircraft equipment manufacturing company, is nearing a deal with Raytheon Technologies (RTX.US) to purchase Raytheon's flight control business for $1.8 billion.

Advanced Micro Devices (AMD.US) trades slightly higher at the beginning of today's Wall Street session. Company unveiled a new, planned line of AI chips yesterday, which initially led to a drop in AMD shares. However, a number of analysts commented positively on the presentation overnight and stock is recovering part of yesterday's losses.

MicroVision (MVIS.US) launched today's trading with a bearish price gap after announcing a $75 million share offering. Stock has recently failed to break above the $7.50 resistance zone and pulled back to the $5.65 support. While it looked like a rebound off the area may have been launched yesterday, stock launched today's trading below it. Source: xStation5

Charles Schwab (SCHW.US) is trading slightly lower at the beginning of today's Wall Street cash session. Company said that it expects a 10-11% YoY drop in Q2 2023 revenue on the back of a smaller interest-earning asset base and softer trading. Company also said that it has experienced a net interest margin compression.

Electric vehicle stocks continue to gain, extending the ongoing rally. Tesla (TSLA.US) is trading higher for the fourteenth consecutive session, which is a record streak for the company. Nikola (NKLA.US) rallies at a double-digit pace today, following a 19% jump in share price yesterday. Other EV companies, like Lucid Group (LCID.US) and Rivian Automotive (RIVN.US), trade around 1% higher at the beginning of today's trading.

Analysts' actions

• IPG Photonics (IPGP.US) was upgraded to "outperform" at Raymond James. Price target set at $170 per share
• Catalent (CTLT.US) was downgraded to "hold" at Jefferies. Price target was set at $44 per share

Advanced Micro Devices (AMD.US) launched today's trading over 2% higher, following the positive reaction of analysts' to yesterday's new product line presentation. Stock is bouncing off the support zone marked with 61.8% retracement in the $123.00 area. Source: xStation5