Mega-caps power Nasdaq to new record high after FOMC statementDow -282.31 at 26989.99, Nasdaq +66.59 at 10020.37, S&P -17.04 at 3190.01 [BRIEFING.COM] The S&P 500 declined 0.5% on Wednesday in a volatile session following the June FOMC statement, while the Nasdaq Composite rose 0.7% to close at another record high. The Dow Jones Industrial Average (-1.0%) and Russell 2000 (-2.6%) continued to pull back from recent gains. The Fed kept the target range for the fed funds rate unchanged at 0.00-0.25%, and its dot plot signaled rates will remain near zero through at least 2022. The Fed's economic projections called for a 6.5% contraction in 2020 GDP, followed by 5.0% growth in 2021. Core PCE inflation is expected to remain below the Fed's 2.0% target through 2020. After the release of the policy directive, the S&P 500 erased prior losses and gained as much as 0.5%, but stocks quickly retraced those gains during Fed Chair Powell's press conference. Mr. Powell didn't say anything particularly new, reiterating the Fed's commitment to supporting the economy, but he did subtly urge Congress to do more. Neither the statement nor the press conference altered today's trading theme, though. Like yesterday, continued strength in the mega-cap stocks provided major support at the index level. Within the S&P 500 sectors, the information technology sector was in a league of its own, rising 1.7% while no other sector finished higher. The energy (-4.9%) and financials (-3.8%) sectors were hit relatively hard, with the financials space pressured by the Fed's acknowledgement of low rates for a while longer. Notably, shares of Apple ($AAPL 352.84, +8.85, +2.6%), Microsoft ($MSFT 196.84, +7.04, +3.7%), Amazon ($AMZN 2647.45, +46.59, +1.8%), Tesla ($TSLA 1025.05, +84.38, +9.0%), and NVIDIA ($NVDA 374.67, +12.83, +3.6%) rallied to new all-time highs. Several brokerage firms raised their price targets on AAPL, AMZN, and TSLA. Separately, Starbucks ($SBUX 79.01, -3.36, -4.1%) said it expects quarterly sales to decline as much as $3.2 billion and operating income to decline as much as $2.2 billion due to the coronavirus. SBUX shares fell 4%. In the Treasury market, longer-dated maturities saw greater demand following the FOMC statement. The 2-yr yield declined three basis points to 0.17%, and the 10-yr yield declined eight basis points to 0.75%. The U.S. Dollar Index declined 0.3% to 96.02. WTI crude gained 1.6%, or $0.62, to $39.54/BBL. Reviewing Wednesday's economic data, which included the Consumer Price Index for May: The Consumer Price Index for May declined 0.1% m/m (Briefing.com consensus 0.0%) following a 0.8% decline in April. Core CPI, which excludes food and energy, also declined 0.1% (Briefing.com consensus 0.0%). That was the third straight monthly decline in core CPI, which is something that has never happened before.The key takeaway from the report is that it shows a trend of disinflation that will keep the Fed favoring easy monetary policy and asset purchases for some time.The weekly MBA Mortgage Applications Index rose 9.3% following a 3.9% decline in the prior week. Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the Producer Price Index for May on Thursday. Nasdaq Composite +11.7% YTDS&P 500 -1.3% YTDDow Jones Industrial Average -5.4% YTDRussell 2000 -12.1% YTD Market Snapshot Dow26989.99-282.31(-1.04%)Nasdaq10020.37+66.59(0.67%)SP 5003190.01-17.04(-0.53%)10-yr Note +32/320.726NYSEAdv 790 Dec 2103 Vol 1.2 blnNasdaqAdv 1211 Dec 2141 Vol 5.1 bln Industry Watch Strong: Information TechnologyWeak: Energy, Financials, Industrials, Real Estate Moving the Market -- Mega-caps power Nasdaq to another record close, while the rest of the market continued to struggle -- Fed kept fed funds rate unchanged and signaled rates will stay near zero at least through 2022, Fed Chair Powell subtly urges Congress to do more-- Relative weakness in the cyclical sectorsECONOMIC EVENTS: In U.S. data, the Consumer Prices Index fell 0.1% in May, with the core rate down 0.1% as well, which undershot estimates. The Federal Reserve's FOMC began its meeting and will announce its rate decision at 2 pm ET. That will be accompanied by the quarterly projections, and will be followed at 2:30 ET by Chair Powell's press conference. TOP NEWS: Shares of Grubhub ($GRUB) are fractionally higher near midday following news that the company and European food delivery service operator Just Eat Takeaway.com ($TKAYY) are in advanced discussions regarding an all-share combination. Just Eat Takeaway.com confirmed the talks following press speculation, including reports from both CNBC and The Wall Street Journal that Grubhub's previous deal talks with Uber ($UBER) had hit an impasse. In other M&A news, Simon Property Group ($SPG) announced that it has exercised its contractual rights to terminate its merger agreement with Taubman Centers ($TCO). Simon argues that Taubman's business has been disproportionately hurt due to the COVID-19 pandemic when compared to the rest of the retail real estate industry, while also alleging that Taubman "has breached its obligation to operate its business in the ordinary course." In midday trading Taubman shares are down 21%, while Simon's stock is down 2%. Starbucks ($SBUX) shares are down 4% near noon after the coffee giant issued an update on its current operating trends and financial expectations for the quarter and the year. Stephens analyst James Rutherford noted that the company's full-year guidance for same-store sales to be down 10%-20% in the Americas compares to the consensus forecast of down 13%. While sales are recovering, the company noted there will continue to be disruption for the rest of the year and its below-consensus adjusted EPS guidance accounts for a higher flow-through of lost revenues due to partner support and additional pandemic-related costs, noted Rutherford. Starbucks also previewed plans to "reposition" its Americas store base, which will include the closure of up to 400 company-operated stores over the next 18 months in conjunction with the opening, over time, of a greater number of new stores in different locations and with "innovative store formats." Shares of Tesla ($TSLA) topped $1,000 for the first time today as CEO Elon Musk is reported to have told his team that it is time to bring the company's Semi truck to volume production. Nikola Motors ($NKLA), which is also working on producing electric and hydrogen fuel cell powered trucks, has seen its stock pull back amid the report following a furious run-up in recent days. MAJOR MOVERS: Among the noteworthy gainers was Five Below ($FIVE), which rose 11% and was upgraded to Buy from Hold by Gordon Haskett analyst Chuck Grom after the retailer reported Q1 results and gave an updated on the performance of reopened stores in Q2. Also higher AMC Entertainment ($AMC), which gained 11% after reporting quarterly results and stating that it currently expects to have it theaters fully open globally in July. Among the notable losers was Hertz ($HTZ), which fell 29% after the company confirmed that it received a letter from the staff of NYSE Regulation that it had determined the company is "no longer suitable for listing" and the exchange will commence proceedings to delist the common stock of the company from the New York Stock Exchange. Also lower was Guess ($GES), which fell 18% after reporting quarterly results and providing its own COVID-19 business update.Source: (Briefing.com)(theFly.com) Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. 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