U.S. stocks edged closer to their record levels on Wednesday, buoyed by mixed data on the economy that kept hopes alive for an imminent cut to interest rates. The S&P 500 rose by 0.3%, coming within 0.6% of its all-time high set in late October, while the Dow Jones Industrial Average climbed 0.9% and the Nasdaq composite added 0.2%.
One of the standout performers driving the S&P 500’s gains was Microchip Technology, which soared by 12.2% after announcing that it expects sales and profit for the final months of the year to exceed earlier forecasts. The company’s CEO, Steve Sanghi, cited better-than-expected business performance and inventory reduction as key factors driving the positive outlook.
Marvell Technology also saw a significant increase, rising by 7.9% after reporting stronger-than-expected profits for the latest quarter. The company’s CEO, Matt Murphy, attributed the success to increased demand for its data center products and announced a strategic acquisition of Celestial AI to enhance its artificial intelligence infrastructure business, with the deal potentially valued at over $3.25 billion.
The broader market was lifted by declining Treasury yields, driven by a report suggesting that U.S. employers may have cut more jobs than added in November. This unexpected weakness in the job market bolstered expectations for a Federal Reserve interest rate cut next week, aimed at supporting the slowing job market.
Lower interest rates are generally welcomed by investors as they can boost asset prices and stimulate economic growth. A positive report on U.S. services business activity also provided a lift, indicating stronger growth than anticipated for retail, finance, and insurance sectors, along with a slowdown in price inflation.
In the bond market, the yield on the 10-year Treasury fell to 4.06% from 4.09% late Tuesday, further supporting the positive sentiment in the stock market. Lower interest rates also contributed to a rebound in bitcoin prices, which climbed above $93,000 after a recent period of volatility.
On Wall Street, American Eagle Outfitters surged by 15.1% after reporting better-than-expected profits, driven by strong holiday shopping demand across its brands. In contrast, Microsoft and Macy’s were among the few companies that experienced losses, with Microsoft falling by 2.5% and Macy’s losing 1.1% despite reporting a better-than-expected profit for the latest quarter.
Overall, the S&P 500 closed up by 20.35 points at 6,849.72, the Dow Jones Industrial Average added 408.44 points to 47,882.90, and the Nasdaq composite gained 40.42 points to 23,454.09.
In global markets, European indexes traded flat following a mixed finish in Asia, where Japan’s Nikkei 225 rose by 1.1% on gains for technology stocks, while Chinese indexes declined on weaker factory activity data.
The positive performance in U.S. stocks was driven by a combination of factors, including optimistic economic data, expectations of a Federal Reserve rate cut, and strong corporate earnings reports. Investors will be closely watching for further developments in the coming days to gauge the market’s direction.
