Wall Street gets back to climbing, and the Nasdaq tops 20,000
NEW YORK — U.S. stock indexes got back to climbing Wednesday after the latest update on inflation appeared to clear the way for more help for the economy from the Federal Reserve.
The Standard & Poor’s 500 index 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 behind the market with a drop of 0.2%.
Stocks got a boost as expectations built that Wednesday’s inflation data will enable the Fed to deliver another cut to interest rates at its meeting next week.
Traders are betting on 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 down to its 2% target.
Lower rates would give a boost to the economy and to prices for investments, but they also could 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,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Expectations for a series of rate cuts 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 boosts for the index on Wednesday came from Nvidia and other Big Tech stocks. Their massive 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 jumped 5.9% to finish above $420 at $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 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.
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 an additional $6 billion to its shareholders by buying back its own stock.
On the losing end of Wall Street, Dave & Buster’s Entertainment tumbled 20.1% after reporting a worse loss for the latest quarter than expected. It also said Chief Executive 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 fell 1.5% after filing 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%.
A day earlier, judges in separate cases in Oregon and Washington nixed the supermarket giants’ merger. The grocers contended that a combination could have helped them compete with big retailers such as Walmart, Costco and Amazon, but critics said it would hurt competition.
After terminating the merger agreement with Kroger, Albertsons said it plans to boost its dividend 25% and increased the size of its program to buy back its own stock.
Macy’s slipped 0.8% after cutting 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 fell 99.27 points to 44,148.56, and the Nasdaq composite rallied 347.65 points to 20,034.89.
In the bond market, the yield on the 10-year Treasury rose to 4.27% from 4.23% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for the Fed, edged up to 4.15% from 4.14%.
In stock markets abroad, indexes rose across much of Europe and Asia.
Hong Kong’s Hang Seng was an outlier and slipped 0.8% as Chinese leaders convened an annual planning meeting in Beijing that is expected to set economic policies and growth targets for the coming year.
South Korea’s Kospi rose 1%, up for a second straight day as it climbs back after last week’s political turmoil in which its president briefly declared martial law.
Choe writes for the Associated Press. AP Writers Matt Ott and Zimo Zhong contributed.