On Wednesday, US benchmark equity indexes closed with mixed results as traders navigated through fresh economic data alongside remarks from a Federal Reserve official. The Nasdaq Composite experienced a decline of 0.3%, settling at 17,084.3, while the S&P 500 also saw a decrease of 0.2%, closing at 5,520.1.
In contrast, the Dow Jones Industrial Average managed to rise by 0.1%, reaching 40,975. Among sectors, energy stocks registered the most significant drop, whereas utilities tracked upward trends, highlighting a contrast in market dynamics. In terms of economic indicators, job openings in the United States dipped to 7.67 million as of the end of July, down from the revised figure of 7.91 million recorded in the previous month.
This data, compiled from the Bureau of Labor Statistics’ Job Openings and Labor Turnover survey, fell short of the expected 8.1 million figure as indicated by Bloomberg’s survey. Oxford Economics commented on the report, emphasizing that it indicates a cooling labor market. Still, they maintain their prediction for the Federal Reserve (Fed) to initiate the normalization of interest rates with a proposed cut of 25 basis points expected on September 18. The Fed's latest Beige Book, released on Wednesday, indicated that economic activity across the majority of districts either stagnated or declined, with the anticipation of stable or slightly improved conditions in the near future.
Additionally, the US trade deficit saw a less-than-expected increase in July, driven by import growth surpassing that of exports, as detailed in government data. In the bond market, the two-year yield fell by 13 basis points to settle at 3.76%, while the yield on the 10-year note dropped by 8.9 basis points to also reach 3.76%.
Atlanta Fed President Raphael Bostic pointed out that policymakers should not wait for inflation to reach the 2% target before initiating interest rate cuts to avoid potential disruptions in the labor market. Bostic expressed a more confident stance regarding inflation but mentioned he's not fully prepared to declare a sense of victory just yet. In commodities, West Texas Intermediate crude oil prices fell by 2.1%, resting at $68.86 per barrel by Wednesday's close.
Analysts at ING noted that oil prices had experienced a sharp decline, mainly due to a broader risk-off sentiment in the market, compounded by the anticipated return of Libyan oil supply. This recent downturn has spurred doubts about whether the Organization of the Petroleum Exporting Countries (OPEC) and its allies will adhere to plans for increasing supply in October. Turning to individual company performances, Dollar Tree ($DLTR) saw its shares plummet by 22%, marking it as the worst performer on both the S&P 500 and Nasdaq indexes.
This drastic fall was attributed to the bargain retailer's fiscal Q2 earnings unexpectedly dropping year over year, with sales failing to meet estimates amid macroeconomic pressures affecting consumers. On a different note, Zscaler ($ZS) experienced the second-steepest decline on the Nasdaq, down nearly 19%.
The cloud security company's outlook for earnings in 2025 fell short of Wall Street's expectations, despite managing to report better-than-anticipated fiscal Q4 results. In a more positive light, Tesla ($TSLA) emerged as the top performer on both the S&P 500 and Nasdaq, enjoying a rise of 4.2%. Reports have surfaced that the electric vehicle manufacturer intends to produce a six-seat variant of its Model Y in China, targeting a launch by late 2025, as cited by Reuters.
Meanwhile, precious metals showed slight gains, with gold up 0.1% to $2,524.20 per troy ounce and silver improving by 0.6% to $28.51 per ounce..