What’s driving markets

Evidence is mounting that U.S. economic growth is slowing. An ISM barometer of business conditions at service-oriented companies such as restaurants, hotels and retailers fell slightly to 55.3% in June and hit the lowest level in two years.

“I think today, just like most days recently, investors are really clinging to any little data point or news headlines that give them a glimpse into where the market could potentially be going from here,” according to Lindsey Bell, chief markets and money strategist at Ally.

“Recently a lot of the discussion has really been around this recession narrative, especially with the yield curve inverting for the third time this year….The market just remains on edge because there’s just a significant amount of uncertainty,” Bell said in an interview.

Treasurys held steady Wednesday morning, though the 2-year yield continued to trade above the 10-year yield.

With interest rates in mind, traders will also be keeping an eye on the minutes of the Federal Reserve’s June meeting, due for release at 2 p.m. Eastern.

“If there is a potential or any wavering from some Fed officials saying that potentially we need to do more, with perhaps a 100 basis point (rate hike) on the table, I think that those are going to be really the key areas to focus on,” Bell said.

“When I think about how to navigate this market right now…it’s really focusing on having that balanced portfolio because we’re in this wait and see mode about where the economic environment is going from here, and how Fed policy plays out,” according to Bell. “You have to have a little bit of exposure to everything.”

Earlier, Asia delivered a somewhat curmudgeonly response to Wall Street’s overnight recovery. Japan’s Nikkei 225
NIK,
-1.20%
lost 1.2% and China’s Shanghai Composite
SHCOMP,
-1.43%
shed 1.4% after it emerged Beijing was once again tacking COVID-19 outbreaks in several regions of the country.

Companies in focus

• Kornit Digital Ltd.
  KRNT,
  -29.65%
  shares plunged 34% Wednesday after the company cut its forecast for the second quarter Tuesday and suggested the third quarter isn’t expected to be much better.

• Shares of Rivian Automotive Inc.
  RIVN,
  +10.28%
   rallied 12% Wednesday, after the electric vehicle maker reported second-quarter deliveries and production that was “in line with the company’s expectations.”

• Uber
  UBER,
  -4.62%
  and DoorDash
  DASH,
  -9.07%
  fell after Amazon
  AMZN,
  -0.11%
   struck a partnership with Grubhub, a unit of Just Eat Takeaway
  JET,
  +15.14%

• Tesla
  TSLA,
  -1.32%
  was down even though the U.S. automaker sold about 78,000 vehicles produced in China in June, up 142 percent from May, according to preliminary data released Wednesday by the China Passenger Car Association (CPCA), the industry federation.

Other markets

• Crude prices were up after the previous session’s sharp drop. West Texas Intermediate crude oil futures
  CL.1,
  -3.83%

  CLQ22,
  -3.83%
  dropped 3.8% to $95.73 a barrel amid concerns that despite a slowing global economy the market remains tight.

• Gold futures
  GC00,
  -1.33%
  were down 0.8% at $1,750 an ounce. The yellow metal sometimes struggles when the dollar rallies and it fell sharply on Tuesday, to leave it changing hands near an eight-month low.

• Silver
  SI00,
  -0.82%
  slipped 0.3% to $19.10 an ounce, near is cheapest since July 2020. The grey metal has also been suffering from concerns slowing economic activity will reduce demand from hi-tech hardware producers.

• Bitcoin
  BTCUSD,
  -1.74%
  is off 1.3% to $20,194.