On Wednesday, the benchmark equity indexes in the United States closed on a high note following comments from Federal Reserve Chair Jerome Powell, who indicated that monetary policy easing could potentially be discussed in the upcoming September meeting. The Nasdaq Composite experienced a notable increase of 2.6%, closing at 17,599.4, while the S&P 500 saw a rise of 1.6% to reach 5,522.3.
The Dow Jones Industrial Average also advanced, albeit modestly, by 0.2%, finishing at 40,842.8. Among the various sectors analyzed, technology stood out as the leading gainer, in contrast to health care, which faced the most significant downturn. Reflecting on the performance for July, it was reported that the Dow gained an impressive 4.4%, while the S&P 500 followed suit with a gain of 1.1%.
In contrast, the Nasdaq recorded a slight decrease of 0.8% during the same period. In the latest meeting, the Federal Open Market Committee (FOMC) opted to keep the benchmark lending rate stable within the range of 5.25% to 5.50%, marking the eighth consecutive pause in rate adjustments. The committee highlighted that, although inflation has moderated over the past year, it remains at a somewhat elevated level.
During his subsequent press conference, Powell addressed the prevailing anticipation for a potential rate reduction at the committee's upcoming meeting scheduled for September 17-18. He acknowledged the possibility but refrained from making any commitments. "If we were to observe, for instance, a rapid decline in inflation or a situation where it aligns with expectations, alongside reasonably strong growth and a labor market remaining consistent with its present state, I would consider that a rate cut could indeed be on the agenda for the September meeting," he stated, emphasizing the FOMC's reliance on data for making policy decisions.
In terms of treasury yields, the US 10-year yield fell sharply by 10.2 basis points to settle at 4.04%, while the two-year rate also declined by 9.4 basis points, landing at 4.26%. Meanwhile, in the corporate landscape, shares of Nvidia ($NVDA) experienced a remarkable surge of nearly 13%, marking the top gainer on the Nasdaq and one of the best performers on the S&P 500.
This upward momentum followed the company's announcement about the launch of generative artificial intelligence models and NIM microservices, aiming to enhance the Universal Scene Description, or OpenUSD framework to broaden its applications across robotics, industrial design, and engineering sectors.
Boeing ($BA), on the other hand, appointed a new chief executive as it contended with a more significant loss than anticipated in the second quarter, but its shares managed to rise by 2%, positioning it among the better performers on the Dow. In a contrasting scenario, Humana ($HUM) faced a sharp decline of 11%, the steepest on the S&P 500, after the health insurer cautioned about higher-than-expected inpatient hospital admissions, despite reporting second-quarter financial results that surpassed market expectations.
Marriott International ($MAR) shares dropped by 4.8%, representing one of the most considerable declines on the S&P 500 and the Nasdaq, following a revision of its full-year earnings and global revenue per available room guidance after encountering lower-than-expected second-quarter sales. On the commodities front, West Texas Intermediate crude oil saw a substantial increase of 5%, climbing to $78.48 per barrel on Wednesday.
This price escalation coincided with the news of Hamas leader Ismail Haniyeh's reported death in Iran, with accusations rife between Iran and Israel regarding his assassination, leading to threats of retaliation from Iran's supreme leader, Ayatollah Ali Khamenei, as per reports from CNBC. In economic indicators, the National Association of Realtors highlighted a surprising uptick in pending home sales across the US last month, bolstered by robust demand in all four major regions, coupled with a rising inventory that conferred greater negotiating power to buyers.
Conversely, the private sector employment growth in the US decelerated in July, with annual pay gains for jobstayers showcasing the most sluggish growth rate in three years, according to Automatic Data Processing ($ADP). Anticipation builds towards the Bureau of Labor Statistics’ upcoming report due on Friday, which is projected to indicate that the US economy added 175,000 nonfarm jobs in the current month—a decline from the 206,000 job gain recorded in June.
In the precious metals market, gold prices rose by 1.7%, reaching $2,492.90 per troy ounce, while silver experienced a gain of 2.2%, trading at $29.14 per ounce..