The S&P 500 and Nasdaq notched record closes for a second consecutive day on Wednesday, lifted by expectations that the Federal Reserve is nearing the start of an interest rate cutting cycle.
The rally was tempered by weakness in some large technology names, including Nvidia, Alphabet and Microsoft, as investors looked for fresh catalysts after a strong run-up in the sector. “Valuations are elevated. I do think, though, at the end of the day, the key will be the delivery of earnings, and that’s what we’re seeing,” said Katherine Bordlemay, co-head of client portfolio management at Goldman Sachs Asset Management, noting that stock-level return dispersion is among the highest in three decades.
Apple rose 1.6% after a Bloomberg report said the company plans to expand into AI-powered robots, smart displays and home security. The Dow Jones Industrial Average climbed 463.66 points, or 1.04%, to 44,922.27. The S&P 500 gained 20.82 points, or 0.32%, to close at 6,466.58, while the Nasdaq Composite added 31.24 points, or 0.14%, to 21,713.14.
The Russell 2000 jumped nearly 2% to a six-month high, boosted by rate-sensitive small-cap stocks. Traders are now fully pricing in a 25 basis-point cut, with some analysts, including Treasury Secretary Scott Bessent, suggesting a larger half-point reduction could be possible due to recent soft labor market data.
Beyond technology, healthcare shares rose 1.6%, making the sector one of the top performers among the S&P 500’s 11 industry groups.
Chicago Fed President Austan Goolsbee said policymakers are assessing whether tariffs will cause only a short-term inflation spike or have a more lasting impact, a factor that could influence the timing of rate cuts.
In corporate moves, AI data center operator CoreWeave plunged nearly 21% after posting a larger-than-expected quarterly loss. Paramount Skydance surged 36.7% after securing exclusive U.S. broadcasting rights to the Ultimate Fighting Championship for seven years.
Advancing stocks outnumbered decliners by more than four-to-one on the NYSE, where 630 issues hit new highs. On the Nasdaq, winners outpaced losers by a 2.53-to-1 ratio. Trading volume on U.S. exchanges reached 16.9 billion shares, below the 20-session average of 18.3 billion.
Related Readings:
