Wall Street's main stock indexes closed higher on Wednesday after the Federal Reserve eased investor jitters by keeping borrowing costs unchanged and reinforcing expectations that rates could be cut as many as three times this year.
Market Snapshot
The Dow Jones Industrial Average rose 401.37 points, or 1.03%, to 39,512.13, the S&P 500 gained 46.11 points, or 0.89%, to 5,224.62 and the Nasdaq Composite gained 202.62 points, or 1.25%, to 16,369.41.
Market Movers
Astera Labs got a warm reception in its Wall Street debut Wednesday, giving investors yet another hot chip play to consider. The first trade of Astera Labs' stock $(ALAB)$ was at 12:39 p.m. Eastern for 2.6 million shares at $52.56, or 46% above its $36 initial-public-offering price. Shares ended the day at $62.03, up 72% from the IPO price.
Shares of Micron popped more than 16% in extended trading on Wednesday after the company announced second-quarter fiscal 2024 results that beat analysts and offered rosy guidance. The company, which makes memory and storage for computers, said it has benefitted from the artificial intelligence boom.
The board of Chipotle Mexican Grill approved a 50-for-1 split of the fast-casual restaurant chain’s common stock. It is the first stock split in the company’s 30-year history. Jack Hartung, the company’s chief financial officer, said the split will make Chipotle’s stock “more accessible to employees as well as a broader range of investors.” Chipotle shares rose 3.5% to $2,895.
Nvidia CEO Jensen Huang said at the company’s GTC conference that there were about $1 trillion of installed data centers in the world, and the chip maker expects to take a larger share of the roughly $250 billion spent a year for data center infrastructure. He also said the company wasn’t just a chip maker. “Nvidia builds an entire data center for AI,” Huang said during an analysts’ Q&A session. Nvidia shares rose 1.1% on Wednesday after closing 1.1% higher on Tuesday.
Boeing gained 3.7% even as Chief Financial Officer Brian West said the aerospace company would be using $4 billion to $4.5 billion of cash flow in the first quarter, more than analysts’ projections, largely because of production problems.
U.S.-listed shares of PDD Holdings rose 3.5% after the parent company of budget online retailers Pinduoduo and Temu reported fourth-quarter earnings and revenue that were well ahead of analysts’ expectations.
Mobileye Global rose 7.5%. The Israeli software company said it was expanding its relationship with Volkswagen, providing the German auto maker with more advanced assisted and autonomous driving software.
JetBlue Airways said it plans to exit several cities and would be reducing flights out of Los Angeles as the carrier focuses on its better-performing routes. The move also will help when the airline has fewer aircraft available, JetBlue said. The airline will be exiting the cities of Bogotá, Colombia; Quito, Ecuador; Lima, Peru; and Kansas City, Mo. JetBlue shares were up 6.9%.
Signet Jewelers posted fourth-quarter adjusted earnings that beat analysts’ expectations but the stock fell 12% after the company issued fiscal first-quarter and year forecasts that missed estimates.
Fourth-quarter profit at BioNTech, the German biotechnology company, fell sharply, weighed down by inventory write-downs by Covid-19 vaccine partner Pfizer. American depositary receipts of BioNTech fell 4.4%.
Riot Platforms rose12% to $12.40 after shares of the Bitcoin miner were upgraded to Overweight from Neutral at J.P. Morgan and the price target was left unchanged at $15.
General Mills was up 1.2% after the maker of Cheerios and other packaged foods reported better-than-expected fiscal third-quarter earnings. The company affirmed its fiscal-year guidance for adjusted earnings and organic sales growth.
Gildan Activewear rose 1.7% on Wednesday and jumped 10% on Tuesday as the T-shirt maker said it received a “confidential nonbinding expression of interest” to acquire it. The company set up a special board committee which contacted a “small number of reputable potential counterparties” with several expressing an “interest in considering a potential friendly transaction with Gildan.”
Intel gained 0.4% after the company said the Commerce Department has proposed up to $8.5 billion in direct funding to the chip maker from the Chips and Science Act. Intel said the funds will support building new chip factories in Arizona, New Mexico, Ohio, and Oregon. The company also expects to be eligible for federal loans up to $11 billion and to receive a tax credit benefit on up to 25% of more than $100 billion in qualified investments.
Market News
Fed holds rates steady and maintains three cuts coming sometime this year
The Federal Reserve on Wednesday held interest rates steady as expected and signaled it still plans multiple cuts before the end of the year.
Following its two-day policy meeting, the central bank’s rate-setting Federal Open Market Committee said it will keep its benchmark overnight borrowing rate in a range between 5.25%-5.5%, where it has held since July 2023.
Reddit Prices IPO at $34 a Share, Valuing It at $6.4 Billion
Reddit, the popular news aggregation social media site, priced its initial public offering at $34 a share late Wednesday, at the high end of its expected range of between $31 and $34 a share.
At that price, Reddit would be valued at $6.4 billion, according to the report. Reddit is raising $519.4 million from the sale of nearly 15.3 million shares. Other Reddit investors are selling an additional 6.7 million shares through the IPO.