Major U.S. stock indexes were mixed in afternoon trading Wednesday, as investors assessed how fresh inflation data could affect the Federal Reserve’s decision on interest rates next week.
The Dow Jones Industrial Average was down 0.7%, while the S&P 500 was off 0.3%, as both indexes recovered from steeper early losses. The Nasdaq Composite swung into positive territory and was up 0.4%, boosted by a near 4% increase in shares of AI investor favorite Nvidia (NVDA).
The S&P 500 and Nasdaq are riding two-session winning streaks, as the market attempts to recover from a rough start to September amid investor concerns about the economy and volatility in technology stocks.
Investors were digesting the latest reading on inflation, released early Wednesday, for clues about the health of the economy and indications of how aggressive the Federal Reserve might be when it starts cutting interest rates. The inflation report, among the last key indicators to be released before the Fed’s policy committee meets next week, showed that consumer prices rose 2.5% in the 12 months through August, slightly lower than economists anticipated but still above the Fed’s 2% target.
Market participants are now pricing in about a 15% chance that the Fed will cut the benchmark interest rate by half a percentage point next week, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. That’s down from the 29% chance that was priced in ahead of the consumer price report, and well below the 50% probability that was priced in last Friday following a weaker-than-expected jobs report for August.
Fed officials have signaled that they are poised to start reducing the influential fed funds rate, but they’ve stressed that data will drive the decisions on the pace and depth of the easing. Attention will now turn to Thursday’s release of weekly jobless claims numbers, as Fed officials have said they have grown increasingly concerned about weakness in the labor market.
The yield on 10-year Treasurys, which is sensitive to expectations around interest rates, rose to 3.67%, after hitting its lowest level in more than a year around 3.60% earlier in the day.
Large-cap tech tech stocks were mixed in afternoon trading, with Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) gaining while Amazon (AMZN) and Meta Platforms (META) lost ground.
Shares of big banks which led the Dow lower on Tuesday after worrisome comments from executives at a conference, were lower again Wednesday. Shares of JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C) and Goldman Sachs (GS) all fell.
Among the big movers, shares of GameStop (GME) were down 15% after the company reported earnings late Tuesday. Trump Media (DJT) shares were down 13% after last night’s presidential debate between Donald Trump and Kamala Harris.
Bitcoin was down slightly to around $57,300 after falling below $56,000 earlier, while gold futures were up slightly at around $2,550 an ounce. WTI crude oil futures rose about 3%, rebounding from Tuesday’s steep losses, as Hurricane Francine threatens production in the Gulf of Mexico.
Watch These JPMorgan Levels Amid Stock’s Slump
18 minutes ago
JPMorgan Chase (JPM) shares were lower again Wednesday after falling more than 5% on Tuesday, which was their largest one-day decline since June 2020. The decline came after the bank’s president said Tuesday that Wall Street’s expectations for net interest income and expenses in 2025 were overly optimistic amid impending interest rate cuts and lingering inflation.
Since the start of September selling has intensified in the stock, with Tuesday’s drop occurring on the highest trading volume since mid April, indicating active participation by larger market participants.
Investors should monitor key lower price levels on JPMorgan’s chart at $200, $191, and $180, while also eyeing potential overhead resistance around $227.
Read the full technical analysis piece here.
Traders Scale Back Bets on Big September Rate Cut
2 hr 1 min ago
Wednesday’s inflation report solidified traders’ expectations that the Federal Reserve will take a less aggressive approach to monetary policy in its upcoming meeting.
Bets on interest rate cuts have swung wildly in recent weeks, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.
The volatility has been caused by market watchers working to predict the Fed officials’ next moves as central bankers rebalance their focus between weakening jobs and falling inflation.
Just before the Consumer Price Index (CPI) inflation data was released, traders were pricing in a 29% chance that the Federal Reserve would cut rates by half a percentage point at their meeting next week. After the report, that chance fell to 15%. Traders were likely influenced by rising rent costs, which pushed up overall measures of inflation.
Beyond September, the largest group of traders thinks a more aggressive cut is possible. Traders think there will most likely be 50 basis-point (bps) cuts in both November and January, with a smaller quarter-point cut in December.
Watch These GameStop Levels as Stock Plunges
2 hr 31 min ago
GameStop (GME) were down 16% Wednesday morning after the video game retailer announced a 20 million share offering and reported a 31% drop in quarterly sales.
Wednesday’s drop opens the door for a potential breakdown below the lower trendline of a symmetrical triangle.
Investors should monitor key post-earnings chart levels at $18.50, $15.25 and $13.25, while also eyeing $30.50 as a bullish target during meme-fueled rallies.
Read the full technical analysis piece here.
Trump Media Shares Slide After Debate
5 hr 11 min ago
Shares of Trump Media & Technology Group (DJT) tumbled Wednesday morning following the presidential debate between Vice President Kamala Harris and former President Donald Trump.
Trump Media shares were 10% lower in recent premarket trading Wednesday, extending a recent pullback that has sent the stock to its lowest point since before the company merged with Digital World Acquisition Corp. (DWAC) and went public in March.
Trump Media’s meme stock-like peaks and valleys that were common in the months after merging with DWAC and becoming a public company have faded in recent weeks, with the stock trending consistently lower since mid-July.
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Major Index Futures Lower Ahead of Inflation Reading
5 hr 29 min ago
Futures tied to the Dow Jones Industrial Average were down 0.4%.
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S&P 500 futures were down 0.2%.
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Nasdaq 100 futures were off 0.3%.
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