Traders work on the floor of the New York Stock Exchange (NYSE) on July 24, 2024 in New York City.
Spencer Platt | Getty Images
Stocks jumped Wednesday as major tech names were led higher by Nvidia and readied for the Federal Reserve’s latest monetary policy decision.
The S&P 500 jumped 1.6%, while the Nasdaq Composite popped about 2.4%. The Dow Jones Industrial Average added 158 points, or 0.4%.
Nvidia shares gained 10.8%, clawing back some of this month’s losses, as better-than-expected results from rival Advanced Micro Devices stoked optimism in the semiconductor space. Other tech stocks such as Apple, Meta Platforms and Amazon were also higher. Microsoft, however, pulled back 1% on disappointing quarterly cloud revenue.
Boeing added 1.7% after announcing a new chief executive officer. The aerospace company also reported a wider-than-expected loss and disappointing revenue for the second quarter. Humana, meanwhile, slid more than 8.5% after posting weak guidance.
Carvana and Qualcomm are among the names set to report after the close.
Lower bond yields on Wednesday are boosting growth stocks, especially as “all eyes are on the Fed” for the day, MRB Partners global strategist Phillip Colmar said. The yield on the 10-year Treasury was recently down by more than four basis points at 4.098%.
“You’re getting a broadening in the market right now…it’s not a broad-based sell-off, it’s really your large-cap tech stocks that got hit hard and are seeing a bit of a bounce,” Colmar said.
Fed decision
The Fed is slated to wrap its two-day policy meeting Wednesday. The central bank is expected to keep rates steady at the meeting, but the focus will be on chair Jerome Powell and whether he offers any signs that cuts may be on the near horizon.
Jobs data released Wednesday hinted at a slowing economy and supported central bankers’ efforts to reduce inflation. Private job growth slowed further in July as the pace of wage gains dropped to a three-year low, according to the latest ADP report.
“Investors are expecting a strong signal for a September rate cut by the Fed,” said Bryce Doty, senior portfolio manager at Sit Investment Associates. “But it’s difficult for the Fed to sound overly confident on a future rate cut because that will beg the question, ‘Why not cut now?’ Consequently, investors are likely to be disappointed by the tone and posture of the Fed meeting.”
Wall Street is also set to wrap up a choppy month of trading. The S&P 500 is up 1.2%, and the Nasdaq has shed roughly 1%.
The Dow and Russell 2000 index of small-cap socks are slated to finish the month higher by more than 4% and 9.5%, respectively. That underscores the market rotation’s boost to stocks that are smaller and more cyclically oriented.
