US benchmark equity indexes closed mixed Wednesday as markets analyzed consumer inflation data for October and comments from Federal Reserve officials. The Dow Jones Industrial Average rose 0.1% to 43,958.2, while the Nasdaq Composite fell 0.3% to 19,230.7. The S&P 500 closed nearly unchanged at 5,985.4.
Among sectors, consumer discretionary led the gainers, while communication services experienced the largest drop. In economic updates, US consumer inflation matched Wall Street's forecasts last month, as government data revealed. "Inflation continues to run hot with little improvement in the core measure since June," said Stifel in a note to clients.
Core inflation, which excludes volatile food and energy components, remains persistently elevated. The probability of policymakers lowering their benchmark lending rate by 25 basis points next month surged to about 82% Wednesday from 59% Tuesday, per the CME FedWatch tool. The remaining probability indicates that interest rates could remain unchanged. Last week, the Federal Open Market Committee took action to cut interest rates by 25 basis points, following a 50-basis-point reduction in September.
Fresh official producer prices data for October are expected to be released Thursday. In a notable turn, mortgage application volume in the US rose for the first time in seven weeks, even as the 30-year fixed-rate for conforming loan balances increased, according to the Mortgage Bankers Association. The US 10-year yield increased by 1.6 basis points to 4.45%, while the two-year rate dropped 6.5 basis points to 4.28%.
The Federal Open Market Committee needs to tread carefully with rate cuts amid potential inflationary pressures, as highlighted by Dallas Fed President Lorie Logan and St. Louis Fed President Alberto Musalem in separate statements. Meanwhile, Kansas City Fed President Jeff Schmid emphasized the necessity for the FOMC to ease policy but noted, "it remains to be seen how much further interest rates will decline or where they might eventually settle." West Texas Intermediate crude oil prices decreased by 0.2% to $67.98 a barrel on Wednesday. In corporate news, Charter Communications ($CHTR) has struck a deal to acquire Liberty Broadband ($LBRDA, $LBRDK) through an all-stock transaction.
As a result, Charter's shares rose by 3.6%, making it one of the top performers on the S&P 500 and the Nasdaq, while Liberty's series A and C common shares retreated by 4.7% and 5.1%, respectively. Rivian Automotive ($RIVN) saw its shares soar nearly 14%. German automotive giant Volkswagen Group plans to invest up to $5.8 billion in the US electric vehicle manufacturer and their new joint venture by 2027, surpassing the earlier proposed $5 billion investment, according to information from the companies. Super Micro Computer ($SMCI) announced inability to file its quarterly report for the period ending September 30 in a timely manner.
Following this news, the artificial intelligence server maker's shares plummeted by 6.3%, marking the most significant decline on the Nasdaq and the second largest on the S&P 500. Meanwhile, gold prices fell by 0.9% to $2,582.80 per troy ounce, and silver lost 1% to $30.46 per ounce..