U.S. stock indexes were rising on Wednesday morning, with the S&P 500 on course for its fourth consecutive all-time high after a batch of well-received earnings showed a healthy corporate America which could impact the outlook for the Federal Reserve’s interest-rate policy.
How are stock indexes trading
- The S&P 500 SPX was adding 32 points, or 0.7%, to 4,896
- The Dow Jones Industrial Average DJIA was rising 104 points, or 0.3%, to 38,009
- The Nasdaq Composite COMP was up 167 points, or 1.1%, to 15,592
On Tuesday, the Dow industrials fell 0.3%, to 37,905, the S&P 500 increased 0.3%, to 4,865, and the Nasdaq Composite gained 0.4%, to 15,426.
What’s driving markets
Technology stocks were leading Wall Street higher again on Wednesday morning, after Netflix NFLX, +12.11% jumped over 13% following the streaming giant’s results that got the technology-sector earnings season off to a good start.
With the S&P 500 sitting at record levels, some investors think it has become increasingly important that the earnings and forecasts of such high-profile names are well-received by the market.
“Although Netflix is not one of the Magnificent 7, it is still seen as a bellwether for the tech sector, and the health of the U.S. consumer,” said Kathleen Brooks, research director at XTB, in emailed commentary.
Earnings reports remain a focus of traders on Wednesday with some tech heavyweights such as Tesla TSLA, +0.89%, IBM IBM, +0.01% and Lam Research LRCX, +2.77%, due to report the results after the closing bell.
See: A key Tesla metric is ‘under threat.’ Wall Street will soon learn more.
Meanwhile, broader support for the market was also coming from Treasuries, where the 10-year yield BX:TMUBMUSD10Y was dipping less than 1 basis point, to trade around 4.14%.
The bond benchmark appears to have found equilibrium around that level following a rollercoaster ride in recent months, suggesting that investors have become more relaxed about inflation, economic growth and the market’s pricing of the Federal Reserve’s policy trajectory.
Shelby McFaddin, senior analyst at Motley Fool Asset Management, said investors would be more inclined to “stay put” until they get “new information” about the health of the economy and whether the central bank is ready to press the button on interest-rate cuts.
“It would make sense to me that there is cautious optimism [in the markets], because if you don’t have anything negative to cling to, you wouldn’t want to sell early,” McFaddin told MarketWatch in an interview.
In U.S. economic data, the S&P flash U.S. services PMI climbed to a seven-month high of 52.9 in January from 51.4 in the prior month, while the flash U.S. manufacturing PMI jumped to a 15-month high of 50.3 this month from 48.2 in December.
Meanwhile, the risk appetite was also boosted after China’s central bank ramped up stimulus by cutting the amount of liquidity that banks are required to hold as reserves, which will provide around $ 139 billion in long-term capital to the market. The move sparked a second day of sharp gains for Chinese equities after suffering their worst daily drop since April 2022 earlier this week.
Companies in focus
- Shares of AT&T Inc. T, -3.11% dropped 3.7% on Wednesday after the telecom company reported $ 16.8 billion in free cash flow for last year, above its prior increased forecast of roughly $ 16.5 billion.
- Abbott Laboratories’ ABT, -2.75% stock fell 2.8% after the healthcare-products company reported fourth-quarter sales that topped expectations amid strength in its medical-device and nutrition segments, even as COVID-test sales continued to plunge.
- Shares of DuPont de Nemours Inc. DD, -11.86% tumbled 13.3%, toward their worst day in nearly four years, after the materials science company issued a profit warning, as the weaker demand seen at the end of 2023 is expected to continue.