US equity indexes experienced fluctuations on Wednesday afternoon as investors assessed the unexpected decline in jobless claims while considering Federal Reserve Governor Christopher Waller's perspective on the easing inflation trend. The S&P 500 declined by 0.1% to 5,906.2, with the Nasdaq Composite also down by 0.1% to 19,463.3, and the Dow Jones Industrial Average slipping 0.1% to 42,497.7.
Throughout the session, all three indexes oscillated between gains and losses. Communication services and utilities led the declines during intraday trading, while healthcare emerged as the lone sector that recorded gains. Unexpectedly, initial jobless claims in the US dropped to 201,000 for the week ending January 4, marking the lowest level observed since February.
This figure was notably below the anticipated increase to 215,000 as indicated in a survey conducted by Bloomberg. The prior week's claims were reported at 211,000. Federal Reserve Governor Christopher Waller indicated on Wednesday his expectation for further easing in inflation in the upcoming months, suggesting that continuing to cut interest rates is the appropriate course.
The latest core personal consumption expenditures (PCE) figure reported was 2.8% for the 12 months ending in November. Waller communicated this information at a conference organized by the Organization for Economic Cooperation and Development, noting, "This is down just a bit from where it was a year earlier, at 3.2%." Waller further cautioned that the slight progress in reducing inflation has spurred discussions around whether to decelerate or halt the policy rate reductions.
He commented, "However, inflation will continue to make progress toward our 2% goal over the medium term, and that further [interest-rate] reductions will be appropriate." In other economic developments, ADP's monthly report on private payroll growth revealed an increase of 122,000 jobs in December.
This figure fell short of forecasts which anticipated a 139,000 rise based on a Bloomberg poll and was also lower than the 146,000 reported in November. During the trading day, US Treasury yields displayed mixed results. The yield on the 10-year note remained steady at 4.68%, achieving its highest intraday level since late April, according to data compiled by CNBC.
The 10-year yield peaked at an intraday high of 4.73%. Meanwhile, the yield on the two-year note decreased by 1.4 basis points, settling at 4.28%. In corporate news, Meta Platforms ($META) announced a test rollout in the US, France, and Germany, allowing buyers to browse eBay ($EBAY) listings on Facebook Marketplace and complete transactions on eBay.
As a result, eBay's shares surged by 9.6% intraday, making it the top performer on the S&P 500 index. Additionally, Deutsche Bank downgraded Palo Alto Networks ($PANW) from a buy to a hold rating, adjusting its price target to $190 from $207. BTIG also reclassified the company's shares to neutral from buy.
Palo Alto's stock fell by 3.2% intraday, making it one of the poorest performers on the Nasdaq exchange. West Texas Intermediate crude oil futures fell by 1.2%, settling at $73.36 a barrel. Furthermore, US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, saw a decrease of 1 million barrels for the week ending January 3, following a decline of 1.2 million barrels in the previous week.
This drop was in contrast to the 2 million barrel decrease that had been anticipated based on a survey conducted by Bloomberg. Gold futures recorded a modest increase of 0.2%, reaching $2,671.01 an ounce, while silver futures declined by 0.2% to $30.64 per ounce..