NEW YORK: Wall Street gained on Wednesday, boosted by a string of largely upbeat corporate earnings, while rising expectations of a Federal Reserve interest rate cut provided additional support.
At 11:18 a.m. ET, the Dow Jones Industrial Average rose 97.14 points, or 0.22%, to 44,207.51, the S&P 500 advanced 33.76 points, or 0.54%, to 6,332.91 and the Nasdaq Composite was up 151.31 points, or 0.72%, at 21,067.86. Arista Networks was a standout, soaring 17.5% to an all-time high after the cloud networking company projected current-quarter revenue above estimates. McDonald’s was 2.8% higher after the fast-food giant’s affordable menu drove global sales past expectations.
Global Payments also advanced 5.2% after topping second-quarter profit forecasts, while Match Group, the parent of Tinder, jumped 14.1% after surpassing revenue expectations for the same quarter. Apple jumped 5.2%, providing the biggest boost to the S&P 500 index, as a White House official said the company would announce a $100 billion domestic manufacturing pledge.
The stock was on track for its biggest single-day jump in nearly three months. In contrast, Advanced Micro Devices tumbled 7.7% as its data center chip revenue disappointed. Super Micro Computer plunged 20.7% after missing fourth-quarter sales estimates, dragging rival Dell down 2.4%. Walt Disney delivered a strong quarter and lifted its full-year outlook, but its shares slipped 3.2%.
Airbnb, DoorDash and Lyft will report their results after the market closes. “Earnings are seeing a mixed reaction. Particularly for a few of the AI names, expectations were just extremely high, but by and large, the earnings in aggregate have been good enough to keep a floor under the market,” said Ross Mayfield, investment strategy analyst at Baird.
Markets also found support in rising bets for a September rate cut after last week’s jobs report showed slowing employment growth and downward revisions for previous months, suggesting a weakening labor market and lifting expectations of a Fed action to boost the economy. Odds for next month’s rate cut stand at 93.2%, compared with just 46.7% last week, according to CME Group’s FedWatch tool. Traders also bet on at least two cuts by the end of 2025.
Tuesday’s data showed US services sector activity unexpectedly stalled in July, highlighting US President Donald Trump’s tariff-related strain on businesses. Trump’s tariff threats showed no signs of easing as he issued an executive order imposing an additional 25% tariff on goods from India due to the country’s Russian oil imports. Adding to the uncertainty, Trump will decide on a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week, while saying he has narrowed the possible replacements for Fed Chair Jerome Powell to a short list of four.
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