Dow, S&P 500 jump to fresh records as key CPI report looms

US stocks popped on Wednesday, as two major indexes clinched fresh records. Wall Street weighed the risk of a Google breakup while dissecting the minutes from the latest Federal Reserve meeting and bracing for the latest report on consumer inflation.

The Nasdaq Composite (^IXIC) rose 0.6%. The S&P 500 (^GSPC) popped about about 0.7%, and the Dow Jones Industrial Average (^DJI) added more than 1%, or nearly 450 points. Both the Dow and S&P 500 closed at all-time highs on Wednesday, as the S&P creeped closer to its next round-numbered milestone: 5,800.

Stocks have whipsawed this week amid intense debate over the state of the economy now the Fed has finally eased up on policy. Its decision to cut by a jumbo 50 basis points raised concerns it might see risks the market could not. That has investors wondering about a “no landing,” where the economy keeps growing and inflation risks once again emerge.

On Wednesday, minutes from the Fed’s September meeting showed that a “substantial majority” of officials supported the half a percentage point interest rate cut. But “some participants” supported a 25 basis point interest rate cut.

Following the minutes, markets are pricing in a 24% chance the Fed doesn’t cut rates at its November meeting. That’s up significantly from just a day ago — and up from a 0% chance seen a week ago, per the CME FedWatch Tool.

Investors will be closely watching the release of the Consumer Price Index (CPI) report for September on Thursday morning for further clues about the Fed’s rate cutting plans.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

Meanwhile, investors absorbed news that the DOJ is considering asking a judge to force Google to sell off key businesses to remedy its monopoly position. Shares of owner Alphabet (GOOG) slipped in early trading, after rising in a broader tech rebound that fueled Tuesday’s solid gains.

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Wed, October 9, 2024 at 10:08 PM GMT+2

Financials and Industrials hit records

It’s not just the S&P 500 and Dow Jones Industrial Average setting records. Both the Industrials (XLI) and Financials (XLF) sector ETFs also closed at record highs on Wednesday.

This marked the first record high for XLF since late August, in the latest sign that the recent push to record highs has been partly driven by stocks outside of Big Tech.
Wed, October 9, 2024 at 9:30 PM GMT+2

Here comes the CPI report…

September’s Consumer Price Index (CPI) will serve as the latest test of whether inflation continues to ease as the Federal Reserve debates its next interest rate decision.

The report, set for release at 8:30 a.m. ET on Thursday, is expected to show headline inflation of 2.3%, a deceleration from August’s 2.5% annual gain in prices, which marked the lowest annual rate since early 2021. Over the prior month, consumer prices are expected to have risen 0.1%, down from the 0.2% increase seen in August.

Disney said its ticket model is designed so that the days in high demand are priced higher. Guests who want a more affordable option are encouraged to find deals on lower-demand days.

“We always provide a wide variety of ticket, dining and hotel options, and promotional offers throughout the year, to welcome as many families as possible,” Jessica Good, spokesperson for Disneyland Resort, said in a statement to Yahoo Finance.

The company has faced criticism regarding the high pricing at its parks, which has contributed to a recent demand slowdown. In an attempt to encourage more visitors, Disney has unveiled discounted tickets for kids and lower hotel prices during off-peak times.

Read more here about what this could mean for the company’s bottom line.
Wed, October 9, 2024 at 5:46 PM GMT+2

Oil pares losses amid US inventory build, uncertainty over Middle East

Oil came off its session lows on Wednesday as traders weighed factors impacting prices this week including the latest US inventory data, China’s stimulus, and the ongoing Middle East conflict.

West Texas Intermediate (CL=F) fell as much as 2% before paring losses to trade near $73 per barrel while Brent (BZ=F), the international benchmark price, also slipped less than 1% to trade above $76.

The latest US government data showed crude inventory rose by 5.81 million barrels last week, less than the gain of 11 million projected by the American Petroleum Group, an industry organization.

Wednesday’s decrease follows a slide of more than 4% in the prior session after China’s stimulus plans appeared to disappoint investors, and traders assessed whether the conflict between Tel Aviv and Tehran would ultimately impact Iran’s crude production.

“If Israel were to strike Iran targeting oil facilities crude is likely underpriced, however, a strategic strike against military operations or other areas with minimal damage, and crude will likely migrate towards the $70/bbl area,” Dennis Kissler, BOK Financial’s senior vice president of trading, wrote in a client note on Wednesday.
Wed, October 9, 2024 at 5:00 PM GMT+2

WeightWatchers stock keeps soaring

WW International (WW) stock has risen more than 2% today, extending its gains from Tuesday after the company announced it’s adding a compounded GLP-1 prescription weight loss offering.

The stock is now up more than 80% over the past five days.
Wed, October 9, 2024 at 4:24 PM GMT+2

Fed’s Logan supports ‘gradual’ rate reductions following initial cut

Dallas Fed president Lorie Logan said Wednesday she would support lowering rates more gradually as the central bank moves forward.

“A more gradual path back to a normal policy stance will likely be appropriate from here to best balance the risks to our dual-mandate goals,” Logan said in a speech in Houston.

Read more here.
Wed, October 9, 2024 at 3:45 PM GMT+2

DOJ’s Google breakup remedy puts tech world on notice

New developments in the US Justice Department’s battle with Google (GOOG, GOOGL) sent shockwaves through the tech world on Wednesday.

Yahoo Finance’s Alexis Keenan reports:

The US Justice Department said in a new court filing that it may recommend a break up of Google as an antidote to unhealthy competition in the search engine market, showing just how far Washington is willing to go to rein in Big Tech.

DOJ lawyers used a 32-page document to outline a framework of options for DC District Court Judge Amit Mehta to consider, including “behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search.”

Google, in a blog post, said that “DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers.”

Read more here.
Wed, October 9, 2024 at 3:34 PM GMT+2

Stocks little changed at the open

US stocks stalled on Wednesday as the risk of a Google breakup prompted a pause for thought in the wait for more Federal Reserve clues to the chances of a “soft landing.”

The Nasdaq Composite (^IXIC) and the S&P 500 (^GSPC) slipped just below the flat line, while the Dow Jones Industrial Average (^DJI) dropped just more than 0.1%.
Wed, October 9, 2024 at 3:22 PM GMT+2

TSMC Q3 sales jump 40%, countering fears of a slowdown in AI spend

Taiwan Semiconductor Manufacturing Co. (TSM) posted quarterly revenues of 759.7 billion New Taiwan dollars ($23.6 billion) on Wednesday, beating the NT$748.3 billion expected in Bloomberg consensus estimates.

The US-listed stock in the Taiwanese company, which makes chips for Nvidia (NVDA) and Apple (AAPL), edged up 0.7% in premarket trading.

Rival Samsung (005930.KS) fell nearly 2%.

TSMC’s third quarter revenue is 40% higher than the prior year and nearly 13% higher than the prior quarter. The results counter fears of a slowdown in AI spending, as companies continue to buy hardware to power generative artificial intelligence tools. TSMC releases its full report on third quarter results on Oct. 17.

Looking ahead, Wall Street analysts expect TSMC to report full-year revenue of NT$2.8 trillion ($87.4 billion), a 30% increase from the prior year. Some 94% of analysts recommend buying the stock and expect its US-listing price to rise to $215 per share over the next 12 months. It closed Tuesday at $197.91 per share
Wed, October 9, 2024 at 2:52 PM GMT+2

Boeing withdraws contract proposal after union talks break down

Boeing (BA) shares were set to open lower on Wednesday after negotiations with its machinist union broke down and the aircraft maker withdrew its contract proposal.

Following a third round of bargaining talks, which included two days of negotiations this week, Boeing COO Stephanie Pope told employees in an email that “further negotiations do not make sense at this point and our offer has been withdrawn.”

Members of the International Association of Machinists and Aerospace Workers (IAM) have been on strike since Sept. 13 after voting down a tentative labor contract.

The union said Boeing refused to propose any wage increases, vacation or sick leave accrual, and would not reinstate a benefit pension, among other issues.

The labor talks breakdown occurred on the same day that rating agency S&P placed Boeing on CreditWatch, increasing the probability of a credit downgrade should the strike continue into the end of the year.

Boeing shares were down more than 1% in premarket trading.