U.S. Stocks Mixed After Record-Breaking Session
On Wednesday, U.S. stocks were mixed, following a record-breaking session on Wall Street the day before. Chip names, which have been a key driver of the current bull run, saw declines, while Treasury yields slightly ate into their advance after a strong 30-year bond auction.
The tech-heavy Nasdaq Composite slipped 0.31% to 16,214.68 points, while the S&P 500 was up marginally by 0.01% to 5,176.00 points. The Dow added 0.45% to 39,182.01 points, with industrial conglomerate 3M contributing to the gains.
Of the 11 S&P sectors, nine were in the green, led by Energy. Technology and Real Estate were the two sectors in the red.
Market participants took a breather on Wednesday, digesting a Wall Street rally that seems to be ignoring negative signals and pushing towards new highs almost daily. Despite a slightly hotter-than-expected consumer price index (CPI) report on Tuesday, equities surged as the data did little to dent expectations of interest rate cuts.
According to Deutsche Bank’s Jim Reid, investors remain unfazed by inflation concerns and continue to see a June rate cut as the most likely outcome. The odds of a 25 basis point rate cut by the Fed in June are now at about 58%, compared to around 63% a day ago.
Treasury yields saw gains, especially in longer-term maturities, after a strong demand at a 30-year bond auction. Dollar Tree was a significant drag on the S&P 500, slumping more than 14% after disappointing quarterly results and guidance.
Overall, the market remains optimistic despite inflation concerns, with investors looking ahead to the Fed’s meeting next week for further guidance on interest rate policies.
