US stocks traded mixed on Wednesday after markets hit their latest all-time highs as investors looked to upcoming data for clues to the health of the economy and the chances of another jumbo rate cut.
The Dow Jones Industrial Average (^DJI) reversed earlier gains to fall about 0.4% while the S&P 500 (^GSPC) held on to positive momentum, rising about 0.1% on the heels of record closes for both major indexes. The tech-heavy Nasdaq Composite (^IXIC) rose about 0.4% after initially opening in the red.
The question now becomes whether or not the US economy could find itself in a recession, with concerns fanned by a surprisingly weak reading on consumer confidence. The debate centers on whether the Federal Reserve lowered rates by a bigger-than-usual 0.5% in response to a slowing economy and what further malaise means for another hoped-for deep cut.
On the data front, new home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.
Mortgage applications, however, jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.
But the spotlight is firmly on Thursday’s second quarter GDP print and Friday’s crucial reading on the PCE index — the inflation gauge favored by the Fed.
The parade of Fed speakers continues with governor Adriana Kugler, whose comments will likewise be scrutinized for insight into the size and pace of coming rate cuts when she appears later Wednesday.
Meanwhile, the boost to markets from China’s big stimulus launch faded amid growing skepticism about whether the steps will be successful in turning around its economy.
Live4 updates
Wed, September 25, 2024 at 11:55 AM EDT
Chip check: Nvidia shares are rising — here’s why
Nvidia (NVDA), a top trending ticker on Yahoo Finance, climbed as much as 3% higher on Wednesday after Mizuho analyst Jordan Klein cited a recent Bain report, which projected the market for artificial intelligence hardware and software could balloon to as much as $990 billion by 2027 — up from current levels of about $185 billion.
The analyst said the forecast “could calm buy-side worry/uncertainty over sustainability of large cloud [capital expenditures] and AI investment spending well beyond 2025.”
The AI darling’s stock is also moving higher on reports that CEO Jensen Huang is done selling his shares in the company. Huang has sold more than $700 million worth of the company’s stock over the past few months.
China just announced its biggest economic stimulus since the pandemic. Yahoo Finance’s Jared Blikre breaks down what the stimulus means for stocks and commodities worldwide:
The country’s currency, the renminbi (CNH=X), dropped 0.6% — the most since the Japanese yen imploded in early August.
In the US, stocks rose, but the biggest effect was felt in commodities. Silver futures (SI=F) skyrocketed over 4.5% to a decade-plus high. Copper futures (HG=F) — already on a nine-day tear — notched a 10th straight win as it surged to a two-month high.
The stimulus, China’s latest attempt to pull its economy out of a slump caused by a shaky property market and deflationary pressures, includes over $325 billion in measures, mostly via monetary — as opposed to fiscal — channels.
New home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.
New single-family home sales slid 4.7% month-over-month to an annualized rate of 716,000, according to government data released Wednesday morning. Sales did fall less than expected, however, as economists had been anticipating a decline of 5.3%.
The median sales price decreased 4.6% to $420,600, marking the seventh straight month of year-over-year price declines. Mortgage rates are also declining as rates have fallen for eight consecutive weeks.
Mortgage applications jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.
Wed, September 25, 2024 at 9:35 AM EDT
S&P 500, Dow open higher
The S&P 500 and Dow opened in positive territory on Wednesday after each hit an all-time high the day prior.
The benchmark S&P 500 (^GSPC) rose about 0.1%, while the Dow Jones Industrial Average (^DJI) inched up roughly 0.2%. The tech-heavy Nasdaq Composite (^IXIC) hugged the flat line.