US benchmark equity indexes experienced losses on Wednesday, with the Dow Jones Industrial Average and the S&P 500 moving back from the record highs achieved in the previous session as market participants assessed the latest economic indicators. The Nasdaq Composite decreased by 0.6%, closing at 19,060.5, while the S&P 500 fell 0.4% to 5,998.7.
The Dow Jones dropped 0.3% to end at 44,722.1. The technology sector noted the most significant decline, while real estate stood out as one of the few sectors to gain. As a reminder, markets will be closed on Thursday in observance of the Thanksgiving holiday. In recent economic news, the growth of US consumer spending slowed down as anticipated in October, with government data revealing that the Federal Reserve's preferred inflation metric increased on an annual basis. "Today's report highlights the persistent strength of US consumers, showcasing a substantial income gain and robust consumer spending in October," noted TD Economics in a recent report.
"Conversely, inflation remains steadfast, eroding some of these real gains." The probability that the Federal Open Market Committee will reduce its benchmark lending rate by 25 basis points next month rose to 67% on Wednesday, up from 59% the previous day, as indicated by the CME FedWatch tool. Conversely, the likelihood of rates remaining unchanged declined to 33% from 41%. US economic growth for Q3 maintained a steady rate with an initial forecast at 2.8%, even as consumer spending experienced an unexpected downward revision according to the Bureau of Economic Analysis’s second estimate. Unexpectedly, pending home sales in the US saw an increase on a sequential basis in October, supported by gains across all regions, as stated by the National Association of Realtors. "Home-buying momentum is gaining traction after nearly two years of subdued home sales," remarked Lawrence Yun, Chief Economist of NAR. US durable goods orders in October rose less than expected, despite a rebound in transportation equipment, according to recent government data. The yield on the US 10-year Treasury note decreased by 5.4 basis points to 4.25% on Wednesday, while the two-year rate dropped by 3.1 basis points to 4.22%. In company-specific news, Dell Technologies had a notable decline, with shares plummeting by 12%, the most significant drop on the S&P 500.
This downturn follows their report of weaker-than-expected revenue for fiscal Q3, stemming from a decrease in their client solutions division, alongside cautious guidance that sparked concerns in the market, according to Morgan Stanley. Autodesk emerged as the weakest performer on the Nasdaq and one of the poorest on the S&P 500, falling 8.6%.
Despite surpassing fiscal Q3 expectations, the company appointed Janesh Moorjani as its new Chief Financial Officer on Tuesday. In another notable development, Walt Disney reached a settlement agreement to pay $43.3 million to resolve a lawsuit claiming that female employees in California were underpaid by $150 million relative to their male counterparts over the past eight years.
Following this news, the media and entertainment giant's stock rose by 1.9%, making it the day’s biggest gainer on the Dow. West Texas Intermediate crude oil prices remained relatively stable at $68.75 per barrel. Additionally, commercial crude inventories in the US saw a larger-than-expected decline last week, as reported by government data. Gold prices increased by 0.6% to $2,636.90 per troy ounce, while silver prices experienced a slight decrease of 0.9%, settling at $30.14 per ounce..