The stock market showed signs of optimism on Wednesday as the Dow Jones Industrial Average led the way with a 0.6% increase. This was fueled by hopes of a potential rate cut due to indications of softening inflation. Nvidia saw its stock rise for the third consecutive day, while Alphabet, the parent company of Google, experienced a decline following reports of potential antitrust actions.
Despite the positive performance of the Dow, the small-cap Russell 2000 fell by 0.5%. The S&P 500 also saw a 0.4% increase and closed near its 50-day moving average. The Nasdaq managed to erase its losses in the final minutes of trading to close with a fractional gain.
The financial and energy sectors saw gains in the S&P 500, while communication services and consumer discretionary sectors lagged behind. Intel made headlines after selling its stake in Arm Holdings in the quarter ending June 29. The markets look ahead to the Jackson Hole Economic Symposium where Fed Chair Jerome Powell is expected to provide insights into potential rate cuts.
Retail earnings from companies like Target, Urban Outfitters, and TJX are expected next week. While Micron led the Nasdaq 100 with a 3.5% increase, Tesla experienced a 3.6% decline.
Inflation eased slightly, with the Consumer Price Index showing a 0.2% increase in July, below economists’ expectations. This development has led traders to foresee a 41.5% chance of a 50-basis-points rate cut in the upcoming Fed meeting.
In the midst of these developments, stocks like DaVita, Marex Group, and BBB Foods broke out, showing positive movements in the market. Nvidia stock also continued to rise after two days of gains, while Alphabet faced challenges amid reports of potential antitrust actions.
Overall, the stock market continues to show signs of resilience and adaptability in response to various economic indicators and company reports. It remains to be seen how upcoming events like jobless claims reports and retail sales data will impact market sentiment in the days ahead.
