U.S. Stocks Move Mostly Higher On Rate Cut Optimism

(RTTNews) - Stocks have moved mostly higher during trading on Wednesday, with the major averages more than offsetting the modest losses posted in the previous session. With the upward move, the S&P 500 is back within striking distance of the record intraday high set in mid-July.

The major averages have seen further upside in recent trading, reaching new highs for the session. The Nasdaq is up 142.62 points or 0.8 percent at 17,959.56, the S&P 500 is up 34.72 points or 0.6 percent at 5,631.84 and the Dow is up 134.28 points or 0.3 percent at 40,969.25.

Optimism about the outlook for interest rates has helped stocks resume their upward trend ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting.

The Fed is due to release the minutes of its late July meeting this afternoon, and traders will be looking for the minutes to support expectations of an interest rate cut next month.

Ahead of the release of the minutes, CME Group's FedWatch Tool suggests there is a 69.5 percent of a quarter point rate cut next month and a 30.5 percent chance of a half point rate cut.

Stocks saw further upside in recent trading after the Labor Department revealed the U.S. economy created 818,000 fewer jobs than originally reported in the twelve-month period ended March 2024.

The weaker than expected previously reported job growth may increase pressure on the Fed to lower rates to support the job market.

Later in the week, remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium are also likely to attract attention.

Among individual stocks, shares of Target (TGT) are moving sharply higher after the retailer reported fiscal second quarter earnings that far exceeded analyst estimates.

Electronic measurement technology company Keysight Technologies (KEYS) is also seeing significant strength after reporting better than expected fiscal third quarter results.

On the other hand, shares of Macy's (M) have come under pressure after the department store operator reported mixed fiscal second quarter results and cut its full-year sales forecast.

Chinese e-commerce company JD.com (JD) has also moved to the notably lower on news Walmart (WMT) has sold its entire stake in the company.

Sector News

Housing stocks are seeing substantial strength on the day, resulting in a 2.4 percent surge by the Philadelphia Housing Sector Index.

Toll Brothers (TOL) has helped lead the sector higher, with the homebuilder spiking by 6.0 percent after reporting better than expected fiscal third quarter results and raising its full-year guidance.

Significant strength is also visible among steel stocks, as reflected by the 2.0 percent jump by the NYSE Arca Steel Index.

Retail stocks area also turning in a strong performance on the day, driving the Dow Jones U.S. Retail Index up by 1.5 percent.

Tobacco, semiconductor and energy stocks are also seeing notable strength, while networking stocks are giving back ground after moving sharply higher in recent sessions.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region once again ended mixed on Wednesday. Japan's Nikkei 225 Index and China's Shanghai Composite Index fell by 0.3 percent and 0.4 percent, respectively, while South Korea's Kospi and Australia's S&P/ASX 2000 Index both rose by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 0.6 percent, the French CAC 40 Index is up by 0.5 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In the bond market, treasuries have shown a lack of direction ahead of the Fed minutes. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.826 percent.