NEW YORK: Wall Street traded within a tight range on Wednesday, as investors assessed second-quarter GDP data and braced for the upcoming Federal Reserve’s policy decision and earnings from major technology behemoths.
At 11:35 a.m. ET, the Dow Jones Industrial Average fell 49.99 points, or 0.11%, to 44,583.00, the S&P 500 gained 3.16 points, or 0.05%, to 6,373.86 and the Nasdaq Composite gained 49.45 points, or 0.23%, to 21,147.32.
US economic growth rebounded in the second quarter, beating expectations, but the reality remains grim as most of the boost came from waning imports, while domestic demand rose only marginally.
“It’s not really the most positive number because the consumption was pretty weak.... from my view, not a hugely encouraging GDP report,” said David Russell, global head of market strategy at TradeStation.
With the Fed widely expected to “hold” rate cuts at the end of its meeting, analysts are eager for Chair Jerome Powell’s comments for any hints on future policy direction, especially as the central bank navigates political pressure and assesses the effects of tariffs on inflation.
Traders see about a 60% chance of a September rate cut, according to the CME’s FedWatch tool.
The latest ADP report showed private payrolls grew by 104,000 in July, topping forecasts of 75,000, ahead of Friday’s all-important nonfarm payrolls release.
The S&P 500 and the Nasdaq on Tuesday snapped their record run due to disappointing results from Dow components UnitedHealth and Merck.
Investors are now placing their bets on results from megacaps to steer Wall Street to new highs. Microsoft and Meta Platforms will report their results after the market closes, while Amazon and Apple will report on Thursday.
Meanwhile, a burst of upbeat earnings from consumer favorites underscored the resilience of American shoppers.
Starbucks posted better-than-expected third-quarter sales, but its shares slipped 0.6% on Wednesday.
Hershey gained 2.3% on results that topped forecasts. VF Corp, parent of Vans, jumped 9.3%, while Kraft Heinz was largely steady after both companies beat quarterly revenue estimates, adding to the consumer-driven rally.
Caution permeated after US President Donald Trump announced a 25% tariff on Indian imports starting August 1 and an additional unspecified penalty over Russian dealings.
The president vowed not to extend the deadline for trading partners that fail to secure a deal before August 1.
Meanwhile, US-China trade talks wrapped up with both sides seeking to extend their tariff truce, leaving the final call in Trump’s hands.
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