Stock market today: Dow, S&P 500, Nasdaq rally as Fed cuts interest rates by 25 basis points

Stocks rallied on Wednesday following the Federal Reserve’s interest rate cut.

The S&P 500 (^GSPC) closed just below a fresh record, while the Dow Jones Industrial Average (^DJI) jumped 1%, or around 500 points.

The tech-heavy Nasdaq Composite (^IXIC) erased earlier losses to rise 0.3%.

The Russell 2000 (^RUT) also jumped to new all-time highs as lower interest rates benefit smaller firms that need to refinance debt.

Oil prices jumped over 1% in the hours after news reports said the US Coast Guard had seized a sanctioned crude tanker off the coast of Venezuela, in an escalation of tensions in the region by the Trump administration.

Futures on Brent crude (BZ=F), the international benchmark for oil, and US benchmark West Texas Intermediate (WTI) crude (CL=F) both gained around 1.2% to trade above $62.60 and $58.90, respectively.

It is unclear to which nation the vessel is flagged, or where it was heading to or from, but the seizure by the Coast Guard marks a new step in the Trump administration’s approach to Venezuela. Destruction of alleged drug-running boats off the coast and increased economic pressure have both frayed relations between the White House and Venezuela’s Nicolás Maduro.

Oil exports out of sanctioned Venezuela, which holds the largest proved oil reserves in the world, account for the lion’s share of the country’s revenue. Chinese refiners are the largest buyers of Venezuelan crude, alongside flows to Russia and other buyers through intermediaries and shadow fleets that disguise the oil’s origin.

Chevron (CVX), the second largest US oil and gas company, also maintains operations in the country — valuable due to Venezuela’s proximity to the US Gulf Coast refinery complex — under an exemption from the Treasury Department that allows the company to operate despite US sanctions.

The S&P 500 (^GSPC) hit session highs on Wednesday, gaining 0.8%. The broad-based index was also nearing a record as Fed Chair Jerome Powell spoke after the Federal Reserve cut interest rates by 25 basis points.

The last time the S&P 500 notched a record was on October 28, when it closed at an all-time high of 6,890.89.

Fed Chair Jerome Powell stated that none of the FOMC members were considering hiking rates.

“I don’t think a rate hike is anybody’s base case right now.. I’m not hearing that,” said Powell.

He said some members wanted to keep rate steady, others want to lower rates or even a bigger rate cut.

Fed Chair Jerome Powell signaled a pause for January, indicating a substantial amount of data will be coming in next week, clearing up uncertainty.

“We’re well-positioned to see how the economy evolves,” said Powell during the presser after the FOMC voted in favor of cutting interest rates by 25 basis points.

The rate cut decision came in a vote of 6-3, signaling a growing divide among FOMC members.

Governor Stephen Miran wanted a larger 50 basis point cut, while Kansas City Fed president Jeff Schmid and Chicago Fed president Austan Goolsbee dissented in favor of keeping rates unchanged.

Investors were closely watching Wednesday’s vote after Fed officials in October’s policy statement revealed two members of the FOMC voted against the decision to lower rates by 0.25%.

US stocks jumped following the Fed’s policy decision.

The Dow Jones Industrial Average (^DJI) rose 0.7%, or over 300 points, while the S&P 500 (^GSPC) added 0.3%. The tech-heavy Nasdaq Composite (^IXIC) was trading flat.

“I think it’s a bit of a relief … given that it could have been even more hawkish,” JPMorgan global market strategist Stephanie Aliaga told Yahoo Finance following the release. “Markets are also taking this with a grain of salt, knowing that next year we’re going to get a lot of changes when it comes to the Fed.”

Treasury yields moved slightly lower. The 10-year Treasury yield (^TNX) declined by 2 basis points to 4.16%. The 30-year yield (^TYX) also declined 2 basis points to 4.78%.

The Federal Reserve voted in favor of lowering the federal funds rate by 25 basis points on Wednesday, its third cut of the year.

The move announced at the conclusion of the Federal Open Market Committee’s last policy meeting of the year was highly anticipated by the market. Investors will pay close attention to Fed Chair Jerome Powell’s press conference, which starts at 2:30 p.m. ET, for commentary that may indicate the path officials may take at their January meeting, given the central bank’s tasks of keeping inflation under control, while at the same time responding to a weakening labor market.

Copper prices rebounded on Wednesday, inching closer to their December record as tight inventories continue to put pressure on the commodity.

Copper on the London Metals Exchange closed a $11,556 per metric ton, a stone’s throw away from its record $11,771 notched earlier this week.

The industrial metal is up roughly 30% year-to-date.

“Ongoing supply disruptions and the repositioning of copper to the U.S. ahead of potential policy changes are impacting an already tight copper market,” Steve Schoffstall, Director of ETF Product Management at Sprott Asset Management, told Yahoo Finance.

“The premium paid for the metal in the U.S. is impacting already low global inventories and is placing upward pressure on global copper prices,” he added.

Bank of America’s top metals strategist, Michael Widmer, said Wednesday that gold (GC=F) is “overbought but underinvested,” with runway to grow.

Over the past year, gold prices have gained more than 60% in a hectic run-up, and the precious metal has been overbought as investors piled into a bandwagon trade. But, Widmer said, “Gold bull markets don’t normally come to an end because they’re overbought.”

Instead, “the gold markets normally come to an end because the underlying conditions that triggered a bull market have subsided, but we don’t see that.”

Higher debt loads constraining US monetary policy, central banks continuing to rotate out of treasuries, and a continued under-allocation in institutional portfolios all point to demand that’s likely to remain solid even if the market sees a small pullback to curb some of the frenzied 2025 buying, according to BofA.

If gold demand continues to grow at a pace roughly in line with the average demand rate since 2001, at around 14%, Widmer said, the precious metal is likely to crack $5,000 per ounce in 2026.

His team sees plenty of potential for such movement. Globally, gold holdings account for around 4% of the total equity and fixed income markets, with room for that allocation to grow, especially as institutional investors who may not have fully jumped in yet continue to add gold as a portfolio diversifier — hence, “overbought, but underinvested.”

And in another sign of steady demand, Widmer said, central banks hold more gold than US Treasurys for the first time since at least the 1990s.

Yahoo Finance’s Jennifer Schonberger reports:

Read the full story here.

Oracle (ORCL) shares dipped fractionally ahead of the growing AI cloud player’s earnings report after the bell on Wednesday.

The company is expected to report earnings per share of $1.64 for its fiscal second quarter, according to consensus estimates of analysts tracked by Bloomberg, up from $1.47 the previous year. Oracle is projected to report revenue of $16.21 billion for the period, up 15% from the year-ago quarter.

Meanwhile, the tech firm’s closely watched AI segment, Oracle Cloud Infrastructure (OCI), is expected to report a 68% climb in revenue to nearly $4.1 billion.

Oracle shares have plunged from their September highs just as its competitors have seen their stocks climb. The AI player is at the center of the AI bubble debate as investors worry over the increasing use of debt to fund tech firms’ capital spending and the entanglement of companies participating in the AI boom through multibillion-dollar circular financing arrangements.

Read more here.

Yahoo Finance’s Jennifer Schonberger reports:

Read the full story here.

Intel (INTC) shares fell more than 3% as the chipmaker — along with Advanced Micro Devices (AMD) and Texas Instruments (TXN) — was accused of failing to keep its tech out of Russian-made weapons, Bloomberg reported.

The accusations were outlined in five lawsuits filed in the Circuit Court for the State of Texas on behalf of Ukrainian civilians. The suits cited five attacks between 2023 and 2025 that resulted in dozens of casualties, according to Bloomberg.

Texas Instruments was roughly flat, while AMD shares dipped fractionally.

Intel’s drop also follows news that the chipmaker — which is in the midst of another turnaround effort under its new CEO Lip-Bu Tan — has taken a key step to acquire an AI chip startup called SambaNova Systems, which is chaired by Tan.

Former executives of Intel told Yahoo Finance last year that previous acquisitions by the storied company haven’t gone well, as internal politics and bureaucracy prevented the chipmaker from seeing the benefit of tech from acquired firms like Habana Labs.

On the flip side, investors have responded well to Intel’s efforts to shed assets. For example, the stock jumped when the chipmaker sold a majority stake in its Altera chip business.

US stocks tilted lower at the market open on Wednesday ahead of the Federal Reserve’s final monetary policy decision on interest rates this afternoon.

The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) hovered below the flat line. The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%.

Investors are also looking to a key earnings report from Oracle (ORCL) after the bell that will give Wall Street more insight into the state of the AI bubble.

Chewy (CHWY) stock fell as much as 7% before bouncing back in premarket trading after the online pet retailer reported a double beat on earnings and revenue. The stock was up 4% at last check.

Adjusted earnings per share were $0.32 in the third quarter, compared to analyst estimates for $0.30, according to S&P Global Market Intelligence. Net sales rose 8.3% year over year to $3.12 billion, compared to estimates of $3.01 billion.

“Chewy continues to outperform the pet category and expand market share, with profits once again growing faster than sales,” CEO Sumit Singh said in the release.

Gross margins were another metric in focus for investors this quarter. Gross margins of 29.8% beat expectations but still dipped from 30.4% in Q2.

“As of late, the view has been that CHWY’s gross margin has limited upside going forward,” UBS’s research team led by Michael Lasser wrote in a note ahead of earnings. “While the scaling of its sponsored ad initiative has been a meaningful gross margin driver of the past several quarters, we think this trend needs to continue for the company to see the same magnitude of GM gains. But until then, bears may point to an increasingly competitive market, pressure from tariffs, and greater promotional activity in the back half of the year to support a capped margin upside.”

Cracker Barrel (CBRL) stock fell 8% before the bell on Wednesday after posting lower-than-expected sales in its fiscal first quarter and trimming its revenue forecast for the year.

The Associated Press reports:

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A few common trends exist now, post-pandemic, such as a resilient American consumer. However, one of the most puzzling inconsistencies is the reaction of bond markets, which are rattled by uncertainty.

Yahoo Finance’s Hamza Shaban looks at why the bond market and the Federal Reserve rate cuts might be out of alignment.

Read more here.