NEW YORK: Wall Street’s main indexes were mixed on Wednesday, with the Dow at a record high and the Nasdaq lagging peers, as investors rotated out of technology stocks while monitoring progress on a likely end to the historic US government shutdown.
Most big tech stocks fell with Alphabet, Tesla and Meta Platforms down between 2.3 percent and 2.6 percent.
Communication services and consumer discretionary sectors were the biggest drags on the S&P 500.
“We have seen somewhat of a rotation away from Nasdaq-heavy leadership toward other areas of the market doing pretty well like healthcare and financials,” said Matt Stucky, chief equity portfolio manager at Northwestern Mutual.
“A critical component for seeing markets broaden out is having earnings broaden out as well.”
News of Japanese technology investor SoftBank Group offloading its Nvidia stake and a forecast cut from AI cloud services provider CoreWeave had renewed concerns about rapidly growing valuations among tech companies on Tuesday.
AMD, which advanced 9.5 percent on Wednesday after the chip designer unveiled a USD100 billion data-center revenue target among other AI-driven goals, was an exception. It boosted the broader semiconductor index 1.5 percent.
Traditionally defensive sectors such as healthcare and consumer staples saw gains. Eli Lilly hit a record high and was last up 1.7 percent.
Financials on the S&P 500 jumped 0.9 percent. Goldman Sachs, up 2.8 percent, was the biggest boost to the Dow.
At 11:57 a.m. ET, the Dow Jones Industrial Average rose 335.14 points, or 0.70 percent, to 48,260.55, the S&P 500 lost 6.27 points, or 0.09 percent, to 6,840.34 and the Nasdaq Composite lost 141.79 points, or 0.60 percent, to 23,326.51.
Members of the House of Representatives headed back to Washington for a vote scheduled for Wednesday evening, that could reopen the government and restore stability to air travel and food subsidies.
Still, President Donald Trump will have to sign the compromise into law.
The 42-day long closure has weighed on the economy, and created a data gap for both the Federal Reserve and traders, leaving them reliant on private economic indicators.
Tuesday’s weekly update of ADP’s preliminary payroll figures showed private employers shedding an average of 11,250 jobs a week for the four weeks ended October 25, pointing to continued weakness in the labor market.
Traders are currently pricing in a 63 percent probability of a quarter-point reduction at December’s monetary policy meeting, CME Group’s FedWatch tool showed.
Atlanta Fed President Raphael Bostic said he would retire when his current term ends in February, amid concerns of a push by Trump for more influence over the Fed.
“If you’re looking for a marginal difference between Bostic and who would likely be appointed, think of somebody ... that could incrementally make the Fed board more dovish in terms of policy,” said Stucky.
The third-quarter earnings season is slowly winding down, but all eyes will remain on Nvidia’s earnings next week, a test of the optimism around AI that has driven Wall Street to record highs this year.
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