Markets today: Wall Street coasts around its records as quiet trading continues
U.S. stock indexes are drifting around their records Wednesday, continuing a dayslong run of quiet trading.
The S&P 500 was virtually unchanged in morning trading, a day after setting its latest all-time high. The Dow Jones Industrial Average was also basically flat, as of 10:45 a.m. Eastern time. It slipped by 20 points, or less than 0.1 per cent, while the Nasdaq composite was edging up by 0.1 per cent from latest record.
Target tumbled 7.4 per cent after the retailer reported profit for the latest quarter that fell short of analysts’ expectations. It also gave forecasted ranges for upcoming profit where the midpoints fell below analysts’ estimates, as it said customers are holding back on purchases of non-essentials. Earlier this week, Target said it was cutting prices on thousands of everyday basics to entice customers struggling with still-high inflation.
Lululemon Athletica sank 6.7 per cent after it said its chief product officer, Sun Choe, is leaving the company this month to “pursue another opportunity.” The company announced a new organizational structure where it won’t replace the role of chief product officer.
They helped to counter a 31.8 per cent leap for Petco Health & Wellness, which reported results and revenue for the latest quarter that were better than analysts feared.
TJX, the off-price retailer of apparel and home goods, rose 6.9 per cent after topping profit expectations. The company behind TJ Maxx and Marshalls also raised its forecast for earnings per share over the full year, saying its prices are helping to attract customers.
The day’s headline profit report will come after trading closes for the day. That’s when analysts expect Nvidia to deliver its latest blockbuster quarter of growth thanks to surging demand for chips used in artificial-intelligence technology.
Nvidia’s stock has grown into the third largest on Wall Street, making it one of the most influential stocks in the market. It will need to keep delivering in order to keep the stock market's frenzy around AI going.
In the bond market, Treasury yields were rising ahead of the release in the afternoon of the minutes from the U.S. Federal Reserve’s last meeting. Some reports recently showing softening in inflation and some parts of the U.S. economy have rekindled hopes that the Fed will be able to cut its main interest rate at least once this year.
Fed officials have said in recent speeches that such reports have been encouraging, but they still largely need to see months more of improving data before they could lower the federal funds rate from its highest level in more than two decades. The Fed is trying to pull off a tightrope walk where it slows the economy just enough through high interest rates to get inflation under control but not so much that it causes a bad recession.
High rates have made everything from credit-card bills to auto-loan payments more expensive. Mortgage rates are also high, and a report on Wednesday showed sales of previously occupied homes weakened by more last month than economists expected.
Central banks around the world seem eager to cut interest rates, but “they may not go far” given how well economies are doing and how high inflation still is, according to Athanasios Vamvakidis, a strategist at Bank of America. He said in a BofA Global Research report that he expects only shallow cuts to interest rates, which may also come later than financial markets seem to be forecasting.
The yield on the 10-year Treasury rose to 4.43 per cent from 4.41 per cent late Tuesday.
In stock markets abroad, indexes were modestly lower across much of Europe and Asia.
London’s FTSE 100 sank 0.8 per cent after the U.K. Office for National Statistics announced a stronger-than-expected inflation reading that hurt hopes for a rate cut in June. Tokyo’s Nikkei 225 fell 0.8 per cent after Japan reported its trade deficit rose last month.
AP Writers Matt Ott and Zimo Zhong contributed.