The S&P 500 rose by 0.4% after ending an eight-day winning streak the previous day, its longest of the year. The index is now just 0.8% shy of its record high set last month.
The Dow Jones Industrial Average increased by 55 points, or 0.1%, while the Nasdaq composite advanced by 0.6%.
In the bond market, Treasury yields dipped slightly as investors anticipate Friday’s key event: a speech by Federal Reserve Chair Jerome Powell at an annual economic symposium. Investors are looking for insights into how aggressively the Fed might start lowering interest rates next month, following its hike to a two-decade high to combat inflation.
Meanwhile, several companies reported strong profit growth, marking the best performance for S&P 500 companies since late 2021.
Target’s shares surged 11.2% after the retailer reported robust spring sales and exceeded profit expectations. The company also raised its full-year forecast.
TJX, the parent company of TJ Maxx and Marshalls, saw its stock rise 6.1% following better-than-expected quarterly profits and an upgraded annual profit forecast, with increased customer transactions across its divisions.
These gains helped offset a 12.9% drop in Macy’s stock. Despite reporting stronger-than-expected profits, Macy’s revenue fell short of forecasts, and it reduced its sales outlook for the year due to a “more discriminating consumer.”
Concerns remain about whether U.S. consumers can sustain their spending amid a slowing economy. While inflation is easing, prices are still significantly higher than before the pandemic, and many households have depleted the savings accumulated during the stay-at-home period.
Particular worries are focused on lower-income U.S. households, which are struggling with higher borrowing costs due to elevated interest rates. This has led to widespread expectations that the Federal Reserve will cut its main interest rate next month for the first time since the COVID-induced economic downturn. The key question is the extent and pace of these cuts.
Federal Reserve officials generally agree that a rate cut is likely in September, provided inflation continues to moderate, according to minutes from their recent meeting released Wednesday.
The yield on the 10-year Treasury, which has been declining since April on expectations of a rate cut, fell further to 3.79% from 3.81% late Tuesday.
A preliminary government report released in the morning showed the economy created 818,000 fewer jobs in the year through March than previously reported, indicating a cooling job market. However, this revision was smaller than some had anticipated.
Nancy Tengler, CEO of Laffer Tengler Investments, suggested focusing on long-term trends, noting rising U.S. worker productivity as a positive economic signal.
On Wall Street, coal companies Arch Resources and Consol Energy experienced fluctuating stock prices following the announcement of their all-stock “merger of equals.” The merged entity will be known as Core Natural Resources. Both stocks initially rose but then fell, with Arch Resources ending down 1.9% and Consol Energy up 0.9%.
Overall, the S&P 500 climbed 23.73 points to 5,620.85. The Dow increased by 55.52 points to 40,890.49, and the Nasdaq composite gained 102.05 points to 17,918.99.
Internationally, stock indexes were mixed, with Japan’s Nikkei 225 slipping 0.3%, reflecting a more subdued movement compared to its recent volatility, including its worst day since the 1987 Black
