US equity indexes exhibited mixed trading patterns with most government bond yields trending upwards following midday on Wednesday as market participants evaluated the latest housing market data. The S&P 500 experienced a slight decline of 0.1%, closing at 5,726.4. The Dow Jones Industrial Average decreased by 0.5%, ending at 41,978.8 after reaching new heights earlier in the session.
Conversely, the Nasdaq Composite posted a marginal gain of 0.1%, concluding at 18,091.5. Utilities and technology sectors spearheaded the day's gains, while energy and healthcare stocks incurred the most significant losses. In economic developments, mortgage applications surged by 11% during the week ending on September 20, marking their highest level since July 2022.
This increase is attributed to the eighth consecutive week of declining mortgage rates, as reported by data from the Mortgage Bankers Association released on Wednesday. Specifically, refinancing applications soared by 20% compared to the previous week, while new purchase applications saw a seasonal adjustment rise of 1%. On the other hand, US new-home sales plummeted to a 716,000 annual rate in August, down from the upwardly revised 751,000 rate in July.
This figure fell short of the anticipated 700,000 rate highlighted in a Bloomberg survey, although home sales remained 9.8% higher year-on-year. The supply of available homes increased by 1.7% to 467,000, representing a 9.1% rise from the previous year. Additionally, most US Treasury yields regarded an upward trend, with the 10-year yield climbing 3.7 basis points to 3.77%, and the two-year yield increasing by 2.5 basis points to reach 3.54%. In the precious metals market, gold prices experienced a slight increase, edging up to $2,677.70 an ounce after achieving an intraday peak of $2,694.89.
However, silver prices dipped by 1.5%, settling at $31.94. The surge in gold prices can be attributed to the Federal Reserve's first interest rate cut in four years last week, coupled with expectations for an additional 50 basis points cut by year-end. Reduced interest rates diminish the cost of holding gold, which does not generate any interest income.
Furthermore, geopolitical tensions, particularly concerning escalating clashes in the Middle East involving Iran-backed Hezbollah and Israel, are further bolstering gold's market performance. The crude oil market saw West Texas Intermediate sliding 2.6% to $69.73 a barrel. According to Saxo Bank's market analysis, "Crude has so failed to gain a foothold above key levels, in WTI around USD 72 and USD 75 in Brent, despite Middle East tensions and a reported decline in US crude inventories to a two-year low.
China’s economic stimulus measures’ potential impact on energy demand remains uncertain, leading to further price pressures." In corporate news, Barclays upgraded Hewlett Packard Enterprise to an overweight position from equal-weight, simultaneous to adjusting its price target from $20 to $24. This resulted in an impressive 4.7% rise in Hewlett Packard's stock during intraday trading, contributing to its status as one of the top performers on the S&P 500. Conversely, Global Payments reported that it anticipates adjusted earnings growth of about 10% in 2025, expanding into the low teens in the following two years.
However, shares plummeted by 5.7% intraday, marking it as one of the worst performers on the S&P 500. General Motors and Ford Motor experienced significant drop-offs in share prices, declining 5.4% and 3.9%, respectively. These decreases follow recent downgrades from Morgan Stanley, which indicated expectations for "greater share loss through the end of the decade, price/mix headwinds, challenges in China, regulatory compliance issues," and other associated risks..