US equity indexes experienced an uptick during midday trading on Wednesday, while most Treasury yields saw a decline after increased expectations for an interest-rate cut in December followed the recent release of October's inflation figures. The S&P 500 increased by 0.3% to 6,004.5, with the Dow Jones Industrial Average rising 0.4% to 44,069.4, and the Nasdaq Composite gaining 0.2% to 19,327.1.
Consumer discretionary and real estate sectors led the gains intraday, while utilities were among the sectors that declined. In terms of economic indicators, the US seasonally adjusted consumer price index reported a 0.2% increase in October, consistent with analyst projections from a Bloomberg survey, and matching a 0.2% rise in September, as detailed by the Bureau of Labor Statistics on Wednesday.
Core CPI, which excludes volatile food and energy prices, also rose by 0.3%, aligning with expectations. The Core CPI maintained its increase of 0.3% from September. Year-over-year, the overall CPI rate accelerated to 2.6%, up from 2.4%, while the core CPI rate held steady at 3.3%. The CME FedWatch tool indicated an 82% probability for a 25 basis-point rate cut in December by Wednesday afternoon, a notable rise from 59% the previous day.
Following a 50 basis-point reduction in September and a 25 basis-point drop in November, the Federal Reserve has set the target range at 4.5% to 4.75%, navigating an easing cycle at a more gradual pace. Federal Open Market Committee member Lorie Logan, President of the Dallas Federal Reserve Bank, emphasized the need for caution in adjusting the target range for the federal funds rate during a joint conference with the Kansas City Fed on Wednesday.
"If we cut too far, past neutral, inflation could reaccelerate and the FOMC could need to reverse direction," Logan remarked. "In these uncertain but potentially very shallow waters, I believe it's best to proceed with caution." Most US Treasury yields dipped, with the two-year yield falling 6.3 basis points to 4.30%, while the 10-year yield edged up 1.6 basis points to 4.45%. In commodity markets, West Texas Intermediate crude oil rose 0.7% to $68.58 per barrel. In corporate news, Super Micro Computer ($SMCI) saw a 3.3% decline during intraday trading, marking it as one of the laggards on the S&P 500 and Nasdaq.
The company cited a delay in filing its quarterly report for the period ending September 30, requiring additional time to finalize its financial statements and disclosures. Berenberg raised its price target for Albemarle ($ALB) to $102 from $81 while maintaining a hold rating. This adjustment propelled the company's shares up by 6.4%, making it the top gainer on the S&P 500. Gold prices fell by 0.8% to $2,586.41 per ounce, while silver dropped 0.4% to $30.64 per ounce..