Wall Street ends mixed amid cooling Middle East tensions; Powell in focus
U.S. stocks took a breather on Wednesday, pausing a two-day rally as the tenuous Israel-Iran cease fire continued to hold and investors pored over a second day of congressional testimony from Federal Reserve Chair Jerome Powell.
ADVERTISEMENT Tech shares lifted the Nasdaq, while the S&P 500 ended flat. The benchmark index remained within striking distance of its record closing high reached on February 19.
The blue-chip Dow ended in negative territory.
"It almost feels like back to your regularly scheduled bull market," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "We've dealt with the tariffs, we've dealt with the Middle East drama, but stocks continue to defy the odds by moving higher with the realization that the U.S. economy remains quite resilient." "But today it's almost like watching paint dry as we're all waiting for the S&P 500 to make new highs," Detrick added.
Nvidia shares touched a record high, lifting its market value to $3.75 trillion and making it the world's most valuable company.
ADVERTISEMENT Among the 11 major sectors of the S&P 500, technology, communication services, and healthcare advanced on the day. Defensives such as real estate, consumer staples and utilities underperformed the broader market. "The lifeblood of a bull market is rotation," Detrick said. "And to see technology and communication services taking back the baton is really a good sign that this surprise summer rally likely has legs."
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The Dow Jones Industrial Average fell 106.59 points, or 0.25%, to 42,982.43, the S&P 500 lost 0.02 points, or 0.00%, to 6,092.16 and the Nasdaq Composite gained 61.02 points, or 0.31%, to 19,973.55. The fragile truce between Israel and Iran continued to hold, with U.S. President Donald Trump declaring victory despite a lack of clarity regarding the extent of the damage U.S. strikes had on Iran's uranium enrichment assets.
ADVERTISEMENT Fed Chair Jerome Powell, in his second straight day of congressional testimony, reiterated to the Senate Banking Committee that the central bank is well-positioned to wait to cut interest rates until the inflationary effects of Trump's wide-ranging tariffs are better known. Financial markets are pricing in almost a 25% likelihood of a rate cut at the July policy meeting, and a 67% probability that the first cut will arrive in September, according to CME's FedWatch tool.
ADVERTISEMENT Housing data on Wednesday showed new home sales plunged 13.7% and applications for loans to buy homes dipped as mortgage rates edged higher. On Thursday, the Commerce Department is due to issue its final take on first-quarter GDP, and its Personal Consumption Expenditures (PCE) report on Friday will provide insights into consumer spending and inflation.
Tesla shares fell 3.8% as its European sales slumped for the fifth month. Economic uncertainty continues to weigh on corporate guidance.
FedEx shares slid 3.3% after the package delivery company forecast quarterly profit below estimates as tariffs weighed on global demand. Rival UPS dropped 1.2%. General Mills also provided disappointing profit guidance, sending its shares 5.1% lower. U.S.-listed shares of cybersecurity firm BlackBerry jumped 12.5% on the heels of its revenue forecast hike, attributed to steady demand. Micron Technology surged more than 5% in extended trading after forecasting better-than-expected fourth-quarter revenue. Declining issues outnumbered advancers by a 1.94-to-1 ratio on the NYSE. There were 174 new highs and 69 new lows on the NYSE. On the Nasdaq, 1,566 stocks rose and 2,859 fell as declining issues outnumbered advancers by a 1.83-to-1 ratio. The S&P 500 posted 24 new 52-week highs and 7 new lows while the Nasdaq Composite recorded 86 new highs and 65 new lows.
Volume on U.S. exchanges was 16.02 billion shares, compared with the 18.08 billion average for the full session over the last 20 trading days.
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