On Wall Street, the S&P 500 index saw gains on Wednesday, spurred by a surge in technology stocks that propelled the Nasdaq to surpass the 20,000-point mark for the first time. This rise came after an inflation report from the U.S. strengthened the likelihood of an upcoming interest rate reduction by the Federal Reserve.
The Dow Jones Industrial Average, however, experienced a slight decline, affected by losses among health insurers following the introduction of a congressional bill that could potentially limit their earnings.
According to a report from the Labor Department, U.S. consumer prices in November saw the largest increase in seven months, aligning closely with market predictions.
Final data indicated that the S&P 500 climbed by 49.21 points, or 0.82%, closing at 6,084.12. The Nasdaq Composite rose by 347.66 points, or 1.77%, reaching 20,034.90. Conversely, the Dow Jones Industrial Average dropped slightly by 94.48 points, or 0.21%, ending at 44,153.35.
“The Nasdaq is rallying due to anticipation of a rate cut next week and there is potential for further growth,” commented Peter Cardillo, chief market economist at Spartan Capital Securities.
Market expectations for a Fed rate cut of 25 basis points next week have increased to over 96%, up from 86% prior to the inflation data, as per CME’s FedWatch Tool. These expectations were influenced by last Friday’s employment report, which indicated an increase in unemployment along with robust job growth.
Yields on the benchmark U.S. 10-year treasury notes increased by 5.2 basis points, reaching 4.267%.
“It appears the equity market is relieved by this consistent report,” stated Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “There were no surprises, and it seems the market was prepared for a potentially higher figure.”
Shares of Tesla hit a new high as the electric car manufacturer continued its upward trajectory following the U.S. presidential election.
Other major tech stocks, such as Nvidia, Alphabet, and Amazon, also ended the day with gains.
However, pharmacy benefit managers like Cigna, CVS Health, and UnitedHealth Group saw their stocks decline after a new bipartisan bill was introduced, threatening to force these health insurers or their drug intermediary businesses to separate from their pharmacy operations.
GameStop shares increased after the video game retailer announced a profit for the third quarter, aided by cost reduction strategies.
Broadcom’s stock surged following reports that Apple is collaborating with the company to develop its inaugural server chip designed specifically for artificial intelligence.
On the other hand, Macy’s faced a downturn after the retail giant lowered its annual profit expectations due to ongoing weak demand, casting a shadow over its prospects for the holiday shopping season.
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Passionate about analyzing economic markets, Alice M. Carter joined THE NORTHERN FORUM with a mission: to make financial concepts accessible to everyone. With over 10 years of experience in economic journalism, she specializes in global economic trends and US financial policies. She firmly believes that a better understanding of the economy is the key to a more informed future.
