Wall Street saw solid gains on Wednesday, lifted by a wave of mostly positive corporate earnings and growing expectations of an upcoming interest rate cut from the Federal Reserve.
As of 11:18 a.m. ET, the Dow Jones Industrial Average climbed 97.14 points (0.22%) to 44,207.51, the S&P 500 rose 33.76 points (0.54%) to 6,332.91, and the Nasdaq Composite jumped 151.31 points (0.72%) to 21,067.86.
Top Performers:
- Arista Networks surged 17.5% to an all-time high after forecasting better-than-expected revenue for the current quarter.
- McDonald’s gained 2.8% thanks to strong global sales driven by its budget-friendly menu.
- Global Payments advanced 5.2% after beating Q2 earnings estimates.
- Match Group, owner of Tinder, soared 14.1% after exceeding revenue expectations.
- Apple jumped 5.2% following reports that it will pledge $100 billion toward domestic manufacturing, marking its biggest single-day rise in nearly three months.
- Decliners:
- Advanced Micro Devices (AMD) fell 7.7% after disappointing data center chip revenue.
- Super Micro Computer plummeted 20.7% on weaker-than-expected Q4 sales, dragging Dell down 2.4%.
- Walt Disney posted a strong quarter and raised its full-year outlook, but its shares slipped 3.2%.
Investors also await earnings from Airbnb, DoorDash, and Lyft, all set to report after the market closes.
According to Baird strategist Ross Mayfield, while reactions to earnings—especially from AI-linked companies—have been mixed due to high expectations, overall results have been strong enough to keep markets supported.
Macroeconomic Factors:
Optimism over a potential Fed rate cut rose after last week’s weak jobs report revealed slower employment growth and revisions to prior data, signaling a cooling labor market. Fed rate cut odds for September surged to 93.2%, up from 46.7% just a week ago, with traders now expecting at least two cuts by year-end 2025.
Adding to concerns, Tuesday’s data showed U.S. services sector growth unexpectedly stalled in July, partly reflecting strain from President Donald Trump’s latest tariff actions. Trump issued an executive order imposing an extra 25% tariff on Indian imports in response to India’s continued purchase of Russian oil.
In the background, Trump also said he will announce a replacement for outgoing Fed Governor Adriana Kugler by week’s end and has narrowed his list of potential successors to Fed Chair Jerome Powell down to four candidates.
Meanwhile, Fed official Neel Kashkari warned that although the economy is slowing and may justify rate cuts, rising inflation—possibly driven by tariffs—could force the central bank to pause or even reverse course.
On market breadth, advancing stocks outpaced decliners by a 1.32-to-1 ratio on the NYSE, while decliners led advancers 1.25-to-1 on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and 13 new lows; the Nasdaq saw 38 new highs and 80 new lows.
