On Wednesday, Wall Street’s key S&P 500 index experienced an increase, while a surge in technology shares propelled the Nasdaq past the 20,000-point threshold for the first occasion, following a U.S. inflation report that raised hopes for a Federal Reserve interest rate reduction.
The Dow Jones Industrial Average saw a decline, impacted by health insurance companies as U.S. legislators presented a bill perceived to limit their profitability.
A report from the Labor Department indicated that U.S. consumer prices in November rose by the largest margin in seven months, though it was generally consistent with market anticipations.
Based on initial figures, the S&P 500 added 49.21 points, or 0.82%, closing at 6,084.12 points, while the Nasdaq Composite increased by 347.66 points, or 1.77%, finishing at 20,034.90. The Dow Jones Industrial Average declined by 94.48 points, or 0.21%, to settle at 44,153.35.
“The Nasdaq is surging due to the anticipation of a rate cut next week, and it has potential for further gains,” remarked Peter Cardillo, chief market economist at Spartan Capital Securities.
Market expectations indicate a greater than 96% likelihood that the Fed will reduce rates by 25 basis points next week, an increase from the 86% chance prior to the release of the data, as noted by CME’s FedWatch Tool. Such probabilities rose after Friday’s employment report, which indicated a rise in unemployment paired with a significant increase in job growth.
Inclusion in the Nasdaq 100 could lead to further increases for MicroStrategy, whose bitcoin holdings were estimated at around $42 billion, as more investment firms add the stock to their portfolios to accurately represent the index’s composition.
To qualify for entry into the index, a stock traded on the Nasdaq exchange must be among the top 100 by market capitalization, maintain a minimum daily trading volume of 200,000 shares, and be excluded from the financial sector. An announcement regarding the reshuffle is scheduled for Friday post-market closure.
The yield on benchmark U.S. 10-year notes increased by 5.2 basis points to reach 4.267%.
“The equity market appears to be exhaling in relief that this report is yet another consistent one,” stated Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “There are no surprises. It seems that the equity market was prepared for a number that was higher than anticipated.”
Tesla’s stock surged to an all-time high as the maker of electric vehicles continued its upward momentum following the U.S. presidential election.
Nvidia and other major growth stocks, including Alphabet and Amazon, also closed higher.
Pharmacy benefit managers such as Cigna, CVS Health, and UnitedHealth Group faced losses after a bipartisan coalition of lawmakers introduced a bill mandating that health insurers or pharmacy middlemen divest their pharmacy operations.
GameStop experienced gains after the video game retailer announced a profit for the third quarter, attributed to cost-saving measures.
Broadcom’s shares rose subsequent to reports that Apple is collaborating with the company to develop its inaugural server chip specifically designed for artificial intelligence.
Macy’s shares fell after the department store leader reduced its annual profit forecast, as ongoing demand weakness clouded its expectations for the holiday shopping period.
