US stocks opened lower Wednesday as investors cashed in some profits following the market’s recent hot streak. Shares of FedEx, seen as a barometer for the economy, cratered following poor results.
The Dow Jones Industrial Average lost 92 points, or 0.2%, which would be its first decline in 10 days. The S&P 500 fell 0.2% after approaching a record high Tuesday. The Nasdaq Composite shed 0.1%.
FedEx slumped 11% in premarket trading after the package delivery giant posted a disappointing revenue outlook for the fiscal year. Results for its fiscal second quarter also fell short of Wall Street’s expectations on the top and bottom lines.
Stocks rose broadly during regular trading Tuesday, with the S&P 500 gaining 0.59% and edging closer to its record close and intraday high hit in January 2022.
The Nasdaq Composite jumped 0.66% to close above the 15,000 level for the first time since January 2022, while the 30-stock Dow advanced 251.90 points, or 0.68%. Both indexes notched a ninth consecutive winning day, and the Dow closed at a fresh record high.
All three major averages are headed for a winning December and 2023 as stocks build on the recent rally and investors look forward to rate cuts from the Federal Reserve in the new year.
The S&P 500 has risen 4.4% this month and 24.2% year to date, while the Dow has added 4.5% and 13.3%, respectively. The Nasdaq is up 5.5% for December and 43.4% for 2023, putting it on pace for its best year since 2020.
While the recent market may appear “strong under the hood” and helpful in fueling broader confidence on Wall Street, Charles Schwab’s Kevin Gordon cautions investors against getting overexuberant.
“This stealthy rotation under the surface can likely continue as we head into 2024, but given the almost (and oddly) euphoric reaction to the Fed’s December decision, it wouldn’t be surprising to see a short-term pullback given sentiment has gotten quite frothy,” the senior investment strategist said.
The tail end of earnings season presses on Wednesday with results from General Mills and Micron Technology. Consumer confidence data for December and existing home sales for November are also due. The personal consumption expenditures price index is set to release on Friday.