The Fed minutes lift investors hopes of a September rate cut

Santiago, Michael M. | Getty Images.

The expectation for lower rates soon was bolstered by a summary of the Federal Reserve’s policy meeting from last month, which led to an increase in the SandP 500 on Wednesday.

With a gain of 0 points42 percent to 5,620 points85, the broad index had its ninth profitable session in the previous ten. The benchmark moved up by 1% from its all-time record close on Wednesday. During the session, 52-week highs were reached by four of the 11 sectors that make up the S&P 500.

In addition to achieving its ninth straight day of gains, the Nasdaq Composite increased 0 points57 percent to 17,918 points99. The Dow Jones Industrial Average had its sixth winning day in the previous seven, closing at 40,890 point49, up 55 points52 points, or 0.14%.

The small-capitalization-focused Russell 2000 index increased by more than 1 percent, outperforming other benchmarks.

The July meeting minutes, which were made public on Wednesday afternoon, revealed that Fed officials had indicated that a reduction in the borrowing cost at the September policy meeting was becoming more likely. As long as data kept coming in as anticipated, most participants said, monetary policy should be loosened.

As a result, traders have increased their expectations, with the CME Group’s FedWatch Tool indicating that there is a 100% chance of a rate cut next month. On the size of the anticipated reduction, this is where the Street differs.

The S&P 500 and Nasdaq Composite ended their longest winning streaks since late 2023 the day before, coincident with the actions on Wednesday. In an unpredictable month for stocks, it was merely the most recent event.

An unstrong U. S. On August 21, a global sell-off was triggered by a jobs report and an interest rate hike by the Bank of Japan. Five. However, since last week, when concerns about a recession were allayed by robust retail sales and an inflation report that was lower than anticipated, stocks have recovered. All three of the major indexes are now higher than they were in August.

Wall Street is currently waiting nervously for remarks from Jerome Powell, the head of the central bank. At this gathering in September, the Fed’s next rate decision may be revealed by the Fed chair during his remarks on Friday at the Jackson Hole Economic Symposium.

Chief investment officer at the Independence Advisor Alliance Chris Zaccarelli stated, “Everyone’s really kind of looking ahead to see what the Fed is going to do next.”. “I believe that the market has temporarily moved its attention away from growth concerns and back toward the Fed rate-cutting cycle. “.”.

On Wednesday, investors were also watching the incoming earnings reports. Target increased by more than 11% following the release of fiscal second quarter earnings that beat Wall Street forecasts. Conversely, Macy’s, a rival retailer, saw a nearly 13% decline due to a revised full-year sales estimate.

The stock market closes higher.

Wednesday’s trading session saw stocks close higher.

There was a roughly 0.4 percent increase in the S&P 500 and 0.6 percent increase in the Nasdaq Composite. The Dow increased by approximately 0.1 percent.

— Alex Harring.

American Express declines 3% following a downgrade by analysts.

American Express was the worst performer in the Dow as it fell more than 3 percent during afternoon trading.

The financial stock’s decline follows Bank of America’s downgrade. In a client note, analyst Mihir Bhatia downgraded the stock from buy to neutral, stating that it is difficult to see further upside given the indications of a waning consumer.

“The long-term execution and strategy of American Express appear favorable to us,” the note stated. “However, recent feedback from travel agencies and retailers indicates that the spending environment is difficult, even for affluent consumers.”.

Bhatia added that the price-to-earnings multiple for American Express is above its historical average.

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– Jesse Pound.

Best day in almost a year, according to Macy’s heads.

The department store is expected to have its worst daily performance in almost a year as a result of the 12 percent decline in Macy’s shares.

The company would have its worst day since August if shares close at this level. 22, 2023, when the value of the shares fell by over 14%.

The company’s sales forecast was lowered and it revealed mixed quarterly results, indicating that it is facing more discriminating customers and aggressive promotions.

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— Samantha Subin.

The performance of banks is inadequate.

On Wednesday, bank stocks did not perform as expected.

A 1 percent decrease was seen in the shares of Citigroup, while Wells Fargo’s shares fell 15%. A total of 0.4 percent fell on both Goldman Sachs and Morgan Stanley. Bank of America and JPMorgan Chase both saw decreases of 0.2 percent.

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Sarah Min.

As Kevin Simpson puts it, TJ Maxx is “back in business.”.

According to Kevin Simpson, founder and CEO of Capital Wealth Planning, the retail and consumer landscape has sufficiently normalized for strong companies like TJX to shine.

“After Covid, they had to essentially catch up to those margins for a number of quarters. However, they are now operating again. They are expanding, Simpson said to CNBC.

According to Simpson, TJ Maxx can thrive in both situations—when customers are “trading down” to less expensive items and when overall spending is high.

The company’s pretax profit margin and gross margin both increased slightly year over year, according to its second-quarter report. Additionally, the business’s operating cash flow increased. In afternoon trading, the stock had gained over 6%.

One of Capital Wealth Planning’s sub-advisers, Amplify CWP Enhanced Dividend Income ETF (DIVO), holds TJ Maxx.

— Pound Jesse.

The Wolfe Research claims that worries about future earnings are “overstated.”.

It’s possible that Wall Street’s assessment of projected earnings revisions was unduly pessimistic due to worries about the U. s. as per Wolfe Research, the economy.

“Our impression is that investors’ concerns over the U.S. economy have caused EPS estimates for the next two quarters to decline. S. Chris Senyek, chief investment strategist, wrote on Wednesday regarding the economy and growth outlook. “We think this fear is exaggerated and expect earnings revisions to be flat to up from here, with growth expectations not falling significantly and the Fed about to embark on a cutting cycle starting in September. “.

— Evans Brian.

Fed meeting minutes indicate that a rate cut in September is likely.

A rate cut in September appeared more likely, according to meeting minutes from the Federal Reserve’s July policy meeting.

According to the summary, which was made public this afternoon, “the vast majority” of attendees at the meeting held from July 30-31 “observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”.

Jeff Cox, Alex Harring.

TJX shares reach all-time highs.

The post-earnings surge for TJX on Wednesday drove the stock to a new all-time high.

Midday trading saw a more than 6% increase in shares of the parent company of Marshalls and HomeGoods. Following a robust earnings report and an increase in its full-year guidance, the discounter made the move on Wednesday.

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In 2024, TJX shares have increased by over 28%. In 1987, the stock was made public.

Alexander Harring and Christopher Hayes.

Around midday, stocks are moving the most.

Shelby Knowles via Bloomberg via Getty Images.

The stocks moving the most during midday trading are these ones:.

Target: Following second-quarter results that exceeded Wall Street’s projections, the retailer’s shares increased by 12%. The business said that sales increased by about 3%, but it kept a cautious outlook.

JD.com: The U.S. s. After Walmart announced that it was selling its interest in the online retailer, traded shares of the Chinese e-commerce company dropped by more than 5%.

Macy’s: The department store’s stock fell more than 12%. Due to increasing promotions and finicky customers, the company lowered its sales projection for the entire year.

See the complete list by clicking this link.

— Subin Samantha.

A 50 basis point rate reduction by the Fed in September could be forced by revisions to nonfarm payrolls, according to economists.

Jeffrey Roach, chief economist at LPL Financial, believes that the Federal Reserve may decide to reduce interest rates further in September as a result of nonfarm payroll revisions data that was made public on Wednesday morning.

Though most predict some kind of decline, market participants are currently split on whether the central bank will cut rates by a quarter or by half a percentage point. Now that the jobs growth has been revised downward, Roach said that a larger decline may be possible.

Investors should anticipate the Fed to prime the markets for a cut at the September meeting, according to Roach, since a failing labor market will give the Fed an opportunity to emphasize both aspects of the dual mandate. “The Fed may decide to reduce by 0.5 percentage points in September if the labor market is weaker than anticipated. “. .

— Alex Harring.

Compact caps perform better.

On Wednesday, small-cap stocks experienced significant increases, regaining some of the ground lost during a challenging month.

In late morning trading, the Russell 2000 saw a gain of about 0.7 percent. The S&P 500 as a whole increased by just 0.2 percent, in contrast.

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The trading on Wednesday occurs during a difficult time for these stocks. August has seen a more than 3 percent decline in the Russell 2000 and a more than 1.5 percent increase in the S&P 500.

— Alex Harring.

Following the earnings report, Keysight is expected to have its best session since 2020.

Keysight Technologies’ quarterly revenue exceeded Wall Street’s projections, setting the company up for its best day in more than four years.

The technology company’s shares increased by over 11% during morning trading. Should that continue until the end of the trading session, the stock will have gained the most in a single day since March 2020, when it surged by over 12 percent.

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The company reported $1.22 billion in revenue for the fiscal third quarter, surpassing the $1.19 billion analysts polled by LSEG had predicted. This news led to the jump on Wednesday. Keysight stated that it expects the current quarter to bring in between $1 point245 billion and $1 point265 billion, which includes the Wall Street estimate of $1 point25 billion.

In 2024, shares have decreased by almost 3% despite the rally.

— Alex Harring.

largest decline since 2009 is shown in the total payroll revision.

According to revised Labor Department data released this morning, the revision of total payrolls shows a 0.5 percent decline. Based on CNBC’s analysis of the data, that represents the biggest downward revision since 2009.

From Alex Harring and Jeff Cox.

revision of 818,000 in nonfarm payroll growth.

Getty Images / Joe Raedle.

On Wednesday, the Labor Department reported that 818,000 fewer jobs were created in the U.S. s. compared to what was first stated for the 12-month period ending in March 2024.

The data was released later than expected on Wednesday morning, and investors were eager to see what it revealed about the state of the labor market. Following the release of the data, stocks increased.

From Alex Harring and Jeff Cox.

Stocks of consumer staples reached an all-time high.

Consumer staples stocks broke the previous record set in April 2022 and reached an all-time high on Wednesday. The industry is expected to rise for a seventh straight month, a run that it hasn’t accomplished since April 2024.

At midday, the S&P 500 sector saw a 0.5 percent increase. Due to its recent earnings beat, Target was the sector’s top performer, rising more than 13 percent. More than 1% increase was also seen in the shares of Dollar General and Estée Lauder.

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Sarah Min and Nick Wells.

BMO says that with increased participation, stock pickers will have “plenty of opportunities.”.

A seasonally weak period for markets is about to begin, but BMO says there will be plenty of opportunity for stock pickers.

The company’s chief investment strategist, Brian Belski, wrote on Tuesday that September may bring another round of weakness for stocks, which currently seem to be pricing in an “almost perfect ‘outcome'” after this month’s slaughter.

Since the performance of stocks has expanded to include the 493 S&P 500 stocks besides the renowned Magnificent Seven names, the strategist anticipates that this indicates it is time for investors to become more selective.

“Given the improving market breadth trends in recent months, we do believe that there are still plenty of opportunities beneath the surface,” Belski stated. To find these opportunities, though, a very selective approach to investing is probably necessary, according to fundamental dispersion trends. “.”.

Sarah Min.

The stock market rises slightly.

Getty Images | Michael M. Santiago.

On Wednesday, the market began trading higher.

Shortly after 9:30 a.m., the Dow added roughly 0.2 percent. me. ET. The Nasdaq Composite and S&P 500 both saw increases in trading of 0.2 percent.

— Alex Harring.

When Ford announces a shift in its EV strategy, its stock rises.

On Wednesday, Ford Motor revealed a number of changes to its strategy for electric vehicles.

postponing the inauguration of a new electric vehicle plant that is presently being built in Tennessee.

A three-row electric SUV has been canceled.

giving electric and hybrid commercial vehicles top priority.

According to Ford, the modifications will result in a $400 million special noncash charge, with possible future costs.

Before the opening bell, the automaker’s shares were up more than 1%.

– Jesse Pound.

TJX gains after strong earnings.

Getty Images | Scott Olson.

TJX shares surged more than 3% following earnings beat estimates and an increase in full-year guidance.

Surplus revenue of $13.47 billion earned the parent company of Marshalls and HomeGoods 96 cents per share. LSEG surveyed analysts who projected $13.31 billion in revenue and just 92 cents in earnings per share.

Even with an increase in its full-year outlook, the range was marginally less than what Wall Street had predicted.

— Alex Harring.

Movers in the premarket: Texas Instruments gains following an upgrade, while JD.com drops 8%.

Here are some of the stocks making notable moves before the bell Wednesday:.

The Chinese e-commerce company JD.com saw an 8% decline in its shares following Walmart’s confirmation that it was selling its ownership of the online retailer.

Keysight Technologies — The electronics company’s stock increased by 11% following a less than anticipated decline in revenue during the third quarter of its fiscal year. LSEG reports that Keysight exceeded analyst estimates of $1.19 billion by reporting $1.22 billion in sales.

Texas Instruments — The tech company’s stock increased by almost 2 percent following a Citi upgrade to buy from neutral.

For the complete list, click this link.

Says Jesse Pound.

Core Natural Resources is the result of the merger of coal producers Arch Resources and Consol Energy.

U. s. On Wednesday, coal producers Arch Resources and Consol Energy decided to unite to form Core Natural Resources, a business that will concentrate on exporting to international markets.

With an annual export capacity of 25 million metric tons, the combined company will have a market capitalization of $5.2 billion. It is anticipated that the merger will be completed by 2025’s first quarter.

In early trading, shares of Consol increased by 4%, while Arch Resources’ stock increased by more than 3%.

As a percentage of U.S. energy, coal has dropped dramatically. S. power generation during the previous 20 years, but it is still widely utilized in developed nations like China and India. It is still a crucial component in the blast furnace process that produces steel.

Kimball, Spencer.

Macy’s slides following a directive cut.

Bloomberg | Getty Images | Eva Marie Uzcategui.

After the retailer lowered its forecast for full-year sales, Macy’s saw a more than 8% decline in premarket trading on Wednesday.

This overshadowed Macy’s impressive earnings for the second fiscal quarter, where the company earned an adjusted 53 cents per share, compared to LSEG-polsted analysts’ expectations of 30 cents. In contrast to the consensus estimate of $5.12 billion, the company reported revenue of $4.94 billion.

— Melissa Repko, Alex Harring.

After earnings beat, Target soars.

Following the retailer’s release of second-quarter results that exceeded forecasts, Target shares saw a premarket increase of almost 14%.

Revenue reached $25.45 billion, with earnings per share of $2.57. A $2.18 profit per share on $25.21 billion in revenue was anticipated by analysts surveyed by LSEG.

Throughout the entire year, Target kept a cautious outlook.

In a call with reporters, Chief Operating Officer Michael Fiddelke stated, “We’ve been happy with our performance so far this year, and our view of the consumer remains largely the same, but the range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high.”.

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— Fred Imbert.

European stocks begin trading higher.

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Following Tuesday’s abrupt end to a lengthy winning run, European stock markets cautiously recovered to open Wednesday’s trading session slightly higher.

At 8:30 a.m., the pan-European Stoxx 600 index was 0.08% higher. me. Sectors mixed, London time. Telecom stocks fell 0.2 percent, while mining stocks increased 12.6 percent.

— Reid Jenni.

Damodaran of NYU claims that Amazon is a “better buy” than Nvidia.

Aswath Damodaran of NYU says that if she had to buy stocks today, she would rather buy Amazon than Nvidia.

“As an investor, I believe Amazon is a better buy than Nvidia if you wanted to go with the mega tech,” the NYU Stern School of Business finance professor stated on Tuesday on CNBC’s “Closing Bell: Overtime.”.

He stated, “I think given the earnings and the cash flows, if I had to buy a stock now, I would rather own Amazon,” adding that Nvidia shares appear overpriced. “It might not play out that way as a trade.”.

— Samantha Subin.

stocks that changed during the course of the night.

Caitlin O’Hara via Bloomberg via Getty Images.

Following the bell, the following stocks saw the largest movements:.

In the fiscal third quarter, Toll Brothers beat Wall Street’s earnings projections, which resulted in a 1% increase in shares of the homebuilding company. For the entire year, Toll Brothers increased its delivery projections.

Microchip Technology—The company’s stock decreased by roughly 2%. In a regulatory filing, the business stated that it found “potentially suspicious activity” in its IT systems, which had an impact on certain operations.

Keysight Technologies: The stock of the manufacturer of test equipment surged by over 10 percent. Keysight provided strong fiscal fourth-quarter revenue guidance, with revenue at the upper end of the range exceeding analysts’ projections.

Click here to view the complete list.

— Samantha Subin.

Futures on stocks start out flat.

Tuesday night, stock futures started the day flat.

The Dow Jones Industrial Average-linked futures gained 15 points. Futures linked to the Nasdaq 100 and the S&P 500 saw minimal changes.

— Samantha Subin.