S&P 500 Closes Slightly Higher as Tech Stocks Cut Losses, Treasury Yields Steady
The S&P 500 closed slightly higher on Wednesday, with tech stocks cutting some losses after treasury yields steadied, despite minutes from the Federal Reserve’s December meeting indicating a slower pace of rate cuts ahead.
The S&P 500 rose 0.2% to 4,084.94, while the Dow Jones Industrial Average added 0.1% to 33,470.57. The Nasdaq Composite slipped 0.1% to 11,574.43.
Fed Minutes Signal Slower Pace of Rate Cuts
The minutes from the Fed’s December 17-18 meeting showed that policymakers were in favor of slowing the pace of rate cuts due to concerns about stalling disinflation. The more cautious sentiment among Fed members on further rate cuts was prompted by slower progress on curbing the pace of inflation towards the 2% target.
Treasury Yields Steady
Treasury yields steadied, following a spike on Tuesday after Fed Governor Christopher Waller backed further rate cuts amid expectations that inflation will likely continue to fall. The 10-year Treasury yield was little changed at 1.84% on Wednesday.
Tech Stocks Cut Losses
Tech stocks cut some losses to end above session lows, with Apple Inc, Alphabet Inc Class C, Meta Platforms Inc, and NVIDIA Corporation hovering near the flatline. Palantir Technologies Inc, however, fell further on concerns about frothy valuations.
Employment Data Boosts Risks of Further Rate Cuts
The number of Americans filing for first-time unemployment benefits unexpectedly edged down last week, touching the lowest level since February. The ADP National Employment Report also showed private payrolls increased by 122,000 jobs last month.
Exxon Mobil and Shell Flag Hit to Earnings
Exxon Mobil fell 1.7% after warning that a decline in oil refining profits and weak returns from across its operations would dent its fourth-quarter income by $1.75 billion. Shell’s stock fell 1.9% after it flagged a charge of $1.3 billion in the fourth quarter related to permits in Germany and the US.