S&P 500, Nasdaq resume ascent as Dow dips lower
NEW YORK — U.S. stock indexes got back to climbing on Wednesday after the latest update on inflation appeared to clear the way for more help for the economy from the Federal Reserve.
The S&P 500 rose 0.8% to break its first two-day losing streak in nearly a month and finished just short of its all-time high. Big Tech stocks led the way, which drove the Nasdaq composite up 1.8% to top the 20,000 level for the first time. The Dow Jones Industrial Average, meanwhile, lagged the market with a dip of 99 points, or 0.2%.
Expectations are growing that Wednesday’s inflation data will allow the Fed to deliver another cut to interest rates at its meeting next week.
Traders think there’s a nearly 99% probability of that, according to data from CME Group, up from 89% a day before. If they’re correct, it would be a third straight cut by the Fed after it began lowering rates in September from a two-decade high. It’s hoping to support a slowing job market after getting inflation nearly all the way down to its 2% target.
Lower rates could further energize the economy and stock prices, but they could also provide more fuel for inflation.
“The data have given the Fed the ‘all clear’ for next week, and today’s inflation data keep a January cut in active discussion,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Expectations for a series of cuts to rates by the Fed have been one of the main reasons the S&P 500 has set an all-time high 57 times this year, with the latest coming last week.
The biggest movers in the index on Wednesday were Nvidia and other big technology stocks. Their growth has made them Wall Street’s biggest stars for years, though other kinds of stocks have recently been catching up somewhat amid hopes for the broader U.S. economy.
Tesla shares jumped 5.9% to $424.77. It’s a level that Elon Musk made famous in a 2018 tweet when he said he had secured funding to take Tesla private at $420 per share.
Stitch Fix shares soared 44.3% after the company that sends clothes to your door reported a smaller loss for the latest quarter than analysts expected. It also gave financial forecasts for the current quarter that were better than expected, including for revenue.
Shares of GE Vernova rallied 5% for one of the biggest gains in the S&P 500. The energy company that spun out of General Electric said it would pay a 25 cent dividend every three months, and it approved a plan to send up to another $6 billion to its shareholders by buying back its own stock.
On the losing end of Wall Street, Dave & Buster’s Entertainment shares tumbled 20.1% after it reported a worse loss for the latest quarter than expected. It also said Chief Executive Officer Chris Morris has resigned, and the board has been working with an executive-search firm for the last few months to find its next permanent leader.
Albertsons shares fell 1.5% after the grocer filed a lawsuit against Kroger, saying it didn’t do enough for their proposed $24.6 billion merger agreement to win regulatory clearance. Albertsons said it’s seeking billions of dollars in damages from Kroger, whose stock rose 1%.
Macy’s shares slipped 0.8% after the retailer cut some of its financial forecasts for the full year of 2024, including for how much profit it expects to make off each $1 of revenue.
All told, the S&P 500 rose 49.28 points to 6,084.19. The Dow dipped 99.27 to 44,148.56, and the Nasdaq composite rallied 347.65 to 20,034.89.
In the bond market, the yield on the 10-year Treasury rose from 4.23% late Tuesday to 4.27%. The two-year Treasury yield, which more closely tracks expectations for the Fed, edged up from 4.14% to 4.15%.
Information for this article was contributed by Matt Ott and Zimo Zhong of The Associated Press.