The S&P 500 index and technology-laden Nasdaq rose on Wednesday to post record high closes, as data pointing to a softening economy raised hopes the Federal Reserve could cut interest rates in September.
Market Snapshot
The Dow Jones Industrial Average fell 23.85 points, or 0.06%, to 39,308.00; the S&P 500 rose 28.01 points, or 0.51%, to 5,537.02 and the Nasdaq Composite rose 159.54 points, or 0.88%, to 18,188.30.
Market Movers
Tesla rose 6.5% to $246.39. Shares of the electric-vehicle maker closed Tuesday up 10% after second-quarter deliveries at Tesla topped Wall Street expectations. The stock has closed higher for seven-straight sessions.
Paramount Global jumped 6.9% after The Wall Street Journal reported it had reached a preliminary deal to combine with Skydance Media. The agreement would see Skydance buy National Amusements, Paramount’s controlling shareholder, and then merge it with Paramount, according to the Journal, which cited people familiar with the matter.
Nvidia rose 4.6% to $128.28, reversing earlier declines. Shares of the chip maker fell 1.3% on Tuesday. The leading maker of chips for artificial-intelligence applications has risen 158% this year but has been in a relative lull over the past week as investors take profits.
Constellation Brands, the alcoholic beverage company, reported fiscal first-quarter adjusted earnings of $3.57 a share on revenue of $2.66 billion. Analysts were expecting a profit of $3.46 a share on revenue of $2.67 billion. The stock fell 3.3%.
Simulations Plus, the modeling and simulation software company, suspended its quarterly dividend, saying the funds would be used toward its “capital allocation strategy for investing in growth initiatives that are intended to generate long-term shareholder value.” Shares declined 15%. The company also reported third-quarter adjusted earnings of 19 cents a share that topped analysts’ estimates and revenue of $18.5 million, an increase of 14% from a year earlier.
First Solar rose 6.6% to $231.06. Analysts at Susquehanna raised their price target on the solar stock to $285 from $258 and maintained a Positive rating on the shares.
CureVac was down 6.6% to $3.12 after GSK reached an agreement to buy the rights to CureVac’s Covid-19 and flu vaccines for up to €1.45 billion ($1.56 billion). CureVac also said it would be reducing its workforce by around 30% under a restructuring plan.
Market News
Fed Sought More Evidence of Cooling Inflation, June Minutes Show
Federal Reserve officials said they were awaiting additional evidence that inflation is cooling and were divided on how long to keep interest rates elevated at their last policy meeting.
Minutes from the two-day Federal Open Market Committee gathering ended June 12 showed officials didn’t expect it would be appropriate to lower borrowing costs “until additional information had emerged to give them greater confidence that inflation” is on track to their 2% goal.
The Fed has held its key policy rate in a target range of 5.25% to 5.5% — the highest level in more than two decades — since last July.
US Labor Market Gradually Slowing; Services Sector Contracts in June
First-time applications for U.S. unemployment benefits increased last week, while the number of people on jobless rolls rose further to a 2-1/2-year high towards the end of June, consistent with a gradual cooling in the labor market.
Weekly jobless claims have drifted higher in June, with the move initially blamed on difficulties ironing out seasonal fluctuations from the data after the Memorial Day holiday in late May. Policy changes last year that allowed non-teaching staff to claim unemployment benefits in at least one state were also blamed. But with claims staying elevated at the end of the month, economists said the labor market was likely slackening.