Economic statistics and Federal Reserve Chair Jerome Powell's comments raised expectations that the U.S. central bank would lower its benchmark interest rate this year, lifting Wall Street's three major indexes on Wednesday.
Powell said Wednesday he anticipated the Fed to drop rates and that the U.S. economy was far from a recession, but he did not commit to a rate easing schedule since inflation was uncertain.
Powell stated before his congressional appearance that inflation has "eased substantially" from 2022's 40-year highs, but policymakers wanted "greater confidence" in its decrease before cutting rates. "He stated that the Fed expects rate reduction this year. The markets needed that. Was it ambiguous? "Yes, but the message was clear," said LPL Financial chief global strategist Quincy Krosby. "It's not if but when the Fed initiates a rate easing policy."
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said Wednesday's economic numbers supported rate cut and labor market confidence along with Powell's remarks. US private payrolls climbed less than expected in February.
AS labor market conditions softened, employment possibilities and hiring declined marginally in the January employment possibilities and Labor Turnover Survey (JOLTS). "The number of job openings shriveled a bit, but are still quite healthy and indicative of a labor market that is still looking pretty stout," he said. "It fits the Goldilocks narrative that's become consensus." Friday's February nonfarm payrolls report should illuminate the labor market. Dow rose 75.86 points, or 0.20%, to 38,661.05. The Nasdaq Composite (.IXIC) jumped 91.96 points, or 0.58%, to 16,031.54, while the S&P 500 (.SPX) advanced 26.11 points, or 0.51%, to 5,104.76
Rate-sensitive utilities (.SPLRCU), up over 1%, and information technology (.SPLRCT), up 0.9%, led nine of the 11 major S&P 500 industrial sectors to the green on Wednesday. The biggest drop in consumer discretionary (.SPLRCD) is 0.4%. After underperforming Tuesday, the Philadelphia semiconductor index (.SOX) gained 2.4% to a record closing high for the fourth time in five sessions. Tesla (TSLA.O) fell 2.3% for the third day, lowering the consumer index. Despite substantial price cut, a major Morgan Stanley analyst lowered his price goal on the business, citing deteriorating electric-vehicle demand in key markets like China.
A Baird analyst expressed concern about Telsa's first-quarter profitability and suggested lowering delivery projections. JD.com's U.S.-listed shares soared 16.2% after reporting above-expected fourth-quarter sales and expanding its share repurchase program. Cryptocurrency-linked equities including Coinbase Global (COIN.O) and MicroStrategy surged 10% and 18.6%, respectively.
The NYSE saw 493 new highs and 59 new lows as advancing issues outnumbered decliners 2.82-to-1. On the Nasdaq, 2,605 stocks rose and 1,687 fell as advancers outperformed decliners 1.54-to-1. S&P 500 had 53 52-week highs and five lows; Nasdaq had 229 and 120. U.S. exchanges traded 12.54 billion shares, up from 12.06 billion in 20 sessions.
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