Sept 11 (Askume) – The three major U.S. stock indexes closed with gains on Wednesday, with technology stocks leading the way as investors shrugged off disappointment after a preliminary inflation report dashed expectations of a 50 basis point interest rate cut by the Federal Reserve next week.
S&P 500 Technology Index (.SPLRCT) AI chip maker Nvidia(NVDA.O) , up 8%. This comes thanks to a report from Semaphore that the U.S. government is considering allowing Nvidia to export advanced chips to Saudi Arabia .
Political developments also weighed on sentiments a day after Democratic candidate Kamala Harris put Republican rival Donald Trump on the defensive during the US presidential debate .
Earlier, the US Department of Labor reported that the consumer price index (CPI) rose 0.2% last month, the same as in July. The core CPI, which excludes volatile food and energy components, rose 0.3% month-on-month, higher than economists’ expectations of a 0.2% increase.
According to CME Group’s FedWatch tool , traders on Tuesday raised the chance of a 25 basis point rate cut to 85% from 66%, and the chance of a 50 basis point rate cut to 15% from 34% a day earlier.
“Perhaps the market is looking for soft inflation data that will give the Fed more reason to cut interest rates by 50 basis points next week,” said Jack Janasiewicz, portfolio manager at Natixis. This report is a little warmer than expected. There is a little pressure on the Fed to cut interest rates by 25 basis points.
Over time, investors are becoming increasingly convinced by inflation data, while also viewing technology as a key factor “helping support the broader market,” Janciewicz said.
The Dow Jones Industrial Average (.DJI) rose 124.75 points, or 0.31%, to 40,861.71; the S&P 500 (.SPX) rose 58.61 points, or 1.07%, to 5,554.13; the IX rose 369.65 points, or 2.17%, to 5,554.13; the BSE rose 5.53 to 17,395.
Six of the 11 major S&P 500 sectors rose on the day, with consumer discretionary (.SPLRCD) leading the way with a 1.3% gain. Among the laggards, energy (.SPNY) fell 0.93% and consumer staples (.SPLRCS) dropped 0.88%.
The S&P 500 Financials index (.SPSY) pared losses and closed down just 0.39%. At intraday lows, the stock was down more than 2%.
The biggest gainer was American Express Co (AXP.N) , whose finance chief said in a conference that credit was strong and consumer spending was stable.
Some of the biggest U.S. banks also recovered from early losses and saw their share prices rise. Goldman Sachs (GS.N) closed 0.9% higher, while JPMorgan Chase & Co (JPM.N) rose 0.8%. The industry was hit on Tuesday by a drop in trading revenue, a slower-than-expected recovery in investment banking and warnings about the impact of rate cuts on interest income .
After the presidential debate and eight weeks before the election, a Harris win contract with a potential payout of $1 was trading at 57 cents on the PredictIt political betting platform, up from 53 cents before the debate. The Trump contract was trading at 48 cents, up from 52 cents before.
As a result, stocks expected to perform well under Trump’s inauguration declined, with cryptocurrency and blockchain-related stocks as well as prison operator stocks also falling. Shares of Trump Media Technology Group (DJT.O) fell 10.5%.
Meanwhile, solar stocks rallied as benefits from the Harris administration poured in. First Solar (FSLR.O) gained 15.2%, Sunrun (RUN.O) gained 11.3% and SolarEdge Technologies (SEDG.O) added 8.5%.
Although the debate did not offer a clear message to Wall Street on key policy issues , some market observers believe Harris’ proposal to raise the corporate tax rate could hurt corporate profits .
GameStop (GME.N) shares fell nearly 12% after the video game retailer said it had applied to issue 20 million shares and reported a drop in second-quarter revenue.
Lithium mining stocks surged after Chinese battery giant CATL (300750.SZ) announced plans to adjust its lithium carbonate production in Yichun. Shares of Albemarle (ALB.N), one of the world’s largest lithium miners, rose 13.6%.
Advancing issues on the NYSE outnumbered declining ones by a 1.4-to-1 ratio, with 342 stocks hitting new highs and 130 hitting new lows.
A total of 2,337 stocks advanced and 1,882 declined on the Nasdaq, with advancing issues outnumbering declining ones by a 1.24-to-1 ratio. The S&P 500 hit 21 new 52-week highs and 17 new lows; the Nasdaq hit 48 new highs and 129 new lows.
A total of 12.19 billion shares traded on U.S. exchanges, compared with the 20-day moving average of 10.8 billion shares.
