Stocks on Wall Street moved higher on Wednesday, with the S&P 500 and the Dow achieving record closing highs following the release of minutes from the Federal Reserve meeting, and in anticipation of September’s inflation figures and the start of the earnings season.
Shares of the major player Alphabet reduced their losses to close down 1.5% after the U.S. Department of Justice indicated it might seek a court’s approval to compel Google to divest certain segments of its business. These could include its Chrome web browser and Android operating system, aimed at limiting its search monopoly.
The minutes from the Fed’s September meeting revealed that a “substantial majority” of officials were in favor of a significant half-point rate cut. Nevertheless, there was a wider consensus that this action would not bind the Fed to a specific schedule of future cuts.
Traders were currently estimating about a 79% likelihood for a 25-basis-point reduction in borrowing costs, with a 21% chance of the Fed maintaining current rates, as per CME’s FedWatch.
“The minutes reaffirmed our prior beliefs, easing investor concerns. There was discussion regarding the 50 basis point cut, which suggests it wasn’t a unanimous decision for a drastic 50 basis point reduction,” remarked Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina.
The market is keenly anticipating the Consumer Price Index inflation report set for Thursday morning and the third-quarter earnings season, which will commence in earnest with reports from major U.S. banks on Friday.
“The minutes also provided further assurance that the Fed is confident in having subdued inflation. Therefore, tomorrow’s CPI figure shouldn’t yield much surprise,” Bell added.
Market activity has experienced volatility this week as investors recalibrate their expectations for rate cuts after a surprisingly robust jobs report for September indicated a U.S. economy in better condition than initially feared by investors.
“There’s a sense of optimism in the market following Friday’s jobs report. Investors continue to feel hopeful about a scenarios with either a mild or no recession at all,” she stated, referencing the potential for the economy to sidestep even a mild downturn.
The Dow Jones Industrial Average saw an increase of 431.63 points, or 1.03%, to finish at 42,512.00. The S&P 500 rose by 40.91 points, or 0.71%, closing at 5,792.04 while the Nasdaq Composite increased by 108.70 points, or 0.60%, to land at 18,291.62.
This marked the S&P’s first closing record high in October but was the 44th overall in 2024. The last closing record for the Dow occurred on October 4.
Among the 11 industry sectors of the S&P 500, 9 experienced gains while interest-sensitive utilities declined by 0.9%, and the communications services index, which includes Alphabet, fell by 0.6%.
“Reports regarding antitrust measures raise concerns about their implications for the technology sector as a whole, particularly for the most prominent players,” noted Daniel Morris, chief market strategist for asset management at BNP Paribas.
Investors were also watching for any possible repercussions from Category 5 Hurricane Milton.
The intensifying hurricane was making its way toward Florida’s western coast, provoking tornadoes and battering the area with rain and winds just hours before its anticipated landfall near Tampa Bay on Wednesday night, where it could unleash a potentially life-threatening surge of seawater on communities already impacted by Hurricane Helene.
In notable stock movements, Boeing shares declined by 3.4% after negotiations between the aerospace firm and its primary manufacturing union collapsed.
On the upside, shares of Norwegian Cruise Line surged by 10.9% following an upgrade from Citi to “buy.” Carnival’s shares rose by 7%, while Royal Caribbean Cruises increased by 5.2%.
Shares of Arcadium Lithium skyrocketed by 30.9% after Rio Tinto declared it would acquire the miner for $6.7 billion.
U.S.-listed shares of China’s Alibaba Group fell by 1.6%, and PDD Holdings decreased by 2.3% as investors speculated about the possibility of new stimulus measures from China.
Advancing stocks surpassed declining stocks by a ratio of 1.31-to-1 on the NYSE, where there were 339 new highs and 49 new lows.
On the Nasdaq, 2,164 stocks gained while 2,113 declined, resulting in a ratio of advancing issues to declining issues of 1.02-to-1. The S&P 500 saw 52 new 52-week highs and two new lows, while the Nasdaq Composite recorded 88 new highs and 133 new lows.
On U.S. exchanges, 11.09 billion shares exchanged hands, compared to the 12.04 billion moving average over the past 20 sessions.
