By US indexes rose on Wednesday as traders took in strong corporate earnings reports and looked ahead to comments from Federal Reserve Chairman Jerome Powell, which could offer guidance on the path of future rate cuts.
Major indexes traded higher, adding to records notched for the S&P 500 and the Nasdaq on Tuesday. Bond yields were up, with the 10-year Treasury yield rising three basis points to 4.256%.
Stocks were led higher by a surge in Salesforce shares, which jumped nearly 10% shortly after the opening bell after the firm reported strong third-quarter earnings, beating Wall Street’s revenue expectations. Chip maker Marvell Technology also climbed 20% higher on the back of strong quarterly results, while Dollar Tree rose 2% after beating revenue and earnings expectations for the quarters.
Corporate earnings have held up strong over the third quarter, with S&P 500 earnings growing 5.8%, according to FactSet data. Of the firms in the index that have reported earnings so far, 75% have beaten earnings per share estimates, per the firm’s analysis.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:
- S&P 500: ,6,082.50 up 0.35%
- Dow Jones Industrial Average: 44,971.83, up 0.60% (+281.11 points)
- Nasdaq composite: 19,607.18, up 0.68%
Traders will also have their eye on Fed Chair Jerome Powell later in the day, who is expected to speak at the New York Times’ DealBook Summit this afternoon. His remarks will give investors some clues on the path of Fed rate cuts into 2025.
Most investors are pricing in 25 basis-point rate cut at the Fed’s December policy meeting, but the outlook for further rate decreases early next year looks uncertain. Markets are pricing in a 16% chance the Fed could cut rates a further 25 basis points in January, according to the CME FedWatch tool, down from 45% odds priced in a month ago.
“Given the significant fiscal and trade policy changes that will be implemented next year, it is increasingly likely that the central bank will want to pause its rate-cutting campaign early in the year to ascertain its probable impact on the economy and inflation dynamics,” Art Hogan, the chief market strategist at B. Riley Wealth Management, wrote in a note on Wednesday.
Here’s what else is happening:
- S&P 500 positioning is “completely one-sided” as bears give up and bullish sentiment soars, according to Citi.
- Here’s why the stock market’s record-breaking run could spell bad news for investors in 2025, according to one Wall Street research firm.
- A strong jobs report this week could boost the “American exceptionalism” trade that’s pushed stocks higher, Bank of America said.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil ticked higher 0.44% to $70.25 a barrel. Brent crude, the international benchmark, rose 0.52% to $74.00 a barrel.
- Gold inched up 0.1% to $2,646 an ounce.
- The 10-year Treasury yield climbed five basis points to 4.271%.
- Bitcoin rose 1.87% to $95,754.78.
