S&P 500 and Dow Jones Reach Record Highs After Fed Minutes – Key Earnings Season Ahead

Wall Street Stocks Hit Record Highs Amid Fed Minutes and Earnings Anticipation

Wall Street stocks surged on Wednesday, with the S&P 500 and Dow Jones Industrial Average both achieving record closing highs. The market rally followed the release of the Federal Reserve's September meeting minutes, ahead of key inflation data and the upcoming earnings season.

Fed Minutes Reveal Rate Cut Support

The Federal Reserve's meeting minutes revealed that a "substantial majority" of officials supported a quarter-point rate cut. However, the decision did not lock the Fed into a specific future pace of cuts, leaving options open. According to CME's FedWatch tool, traders are pricing in a 79% chance of a 25-basis-point rate cut, with a 21% chance of no change.

Lindsey Bell, chief strategist at 248 Ventures, noted, "The minutes confirmed expectations and brought relief to investors. There was some debate about the extent of the rate cut, signaling it wasn’t a unanimous decision for a drastic cut."

Investors Await CPI Data and Earnings Season

Investor attention is shifting to Thursday’s Consumer Price Index (CPI) inflation report and the start of the third-quarter earnings season, led by major U.S. banks. Bell added, "The Fed’s minutes suggest they believe the inflation battle is mostly won, so tomorrow’s CPI report shouldn't be a major surprise."

Market Reaction

The Dow Jones Industrial Average rose by 431.63 points (1.03%), closing at 34,512.00. The S&P 500 climbed 40.91 points (0.71%) to 4,492.04, while the Nasdaq Composite gained 108.70 points (0.60%) to 13,291.62. The S&P 500 hit a new closing record, marking its 44th record high in 2024.

Sector Performance and Notable Stock Movements

Of the 11 sectors in the S&P 500, nine advanced, with rate-sensitive utilities dropping 0.9%. Alphabet pared earlier losses to finish down 1.5% after the U.S. Department of Justice indicated it might ask a judge to force Google to divest its Chrome browser and Android operating system. The communications services index, which includes Alphabet, also fell by 0.6%.

Boeing shares dropped 3.4% after contract talks with its key manufacturing union broke down. In contrast, Norwegian Cruise Line soared 10.9% after Citi upgraded its rating to "buy." Other cruise operators, Carnival and Royal Caribbean, also saw gains of 7% and 5.2%, respectively.

Additionally, shares of Arcadium Lithium surged 30.9% after Rio Tinto announced plans to acquire the company for $6.7 billion.

Global and Weather Concerns

Meanwhile, investors were monitoring potential impacts from Category 5 Hurricane Milton, which was approaching Florida's west coast. The hurricane was expected to bring severe storm surges and tornados, and Tampa Bay was bracing for its landfall on Wednesday night.

Market Breadth

On the NYSE, advancing stocks outnumbered decliners by a 1.31-to-1 ratio, with 339 new highs and 49 new lows recorded. The Nasdaq saw 2,164 stocks rise, while 2,113 fell, resulting in a narrower 1.02-to-1 ratio. The S&P 500 posted 52 new 52-week highs and two new lows, while the Nasdaq recorded 88 new highs and 133 new lows.

Trading Volume

Trading volume remained robust, with 11.09 billion shares changing hands on U.S. exchanges, slightly below the 20-session average of 12.04 billion.