By Chibuike Oguh
NEW YORK (Reuters) – The Nasdaq and Nasdaq posted their biggest daily percentage gains since Feb. 22 and the Dow Jones rose on Wednesday as chip stocks recovered and the Federal Reserve kept U.S. interest rates unchanged while announcing a possible easing in September if inflation cools down.
Seven of the 11 S&P 500 sectors advanced, led by technology and consumer discretionary stocks. Healthcare, real estate and consumer goods were the weakest.
The Fed kept its key interest rate in a range of 5.25%-5.50% as it concluded its two-day policy meeting on Wednesday, but opened the door to easing in September, seven weeks before the US elections in November. The yield on US 10-year bonds fell by 9.8 basis points to 4.043%.
The S&P 500 rose 0.24% to 40,842.79, the S&P 500 rose 1.58% to 5,522.30 and the advanced 2.64% to 17,599.40.
“It was the world’s worst-kept secret that the Fed wasn’t going to cut in July,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. “The Fed will have a day in the sun in September with a 25 or 50 basis point cut, but I wouldn’t be surprised if that’s already priced into stocks.”
At his news conference, Fed Chairman Jerome Powell said policymakers were discussing the case for a rate cut, but a “strong majority” agreed it was not the right time.
“The statement didn’t change anything at all,” said Mark Malek, chief investment officer at Siebert Next in New York, referring to the Fed’s official statement. “But listening to him, it’s clear they’re all ready for the September rate cut and they’re going to keep their option.”
Data released early Wednesday showed U.S. private payrolls rose much less than expected in July, suggesting the ongoing labor market tightness is easing.
This month, the S&P 500 rose 1.1%, the Dow Jones rose 4.4%, while the Nasdaq lost 0.8%.
Nvidia (NASDAQ:) rose nearly 13%, helped by rosy 2024 sales forecasts for artificial intelligence chips from rival Advanced Micro Devices (NASDAQ:), whose shares also rose 4.3%. The rose finished almost 7%.
U.S. President Joe Biden’s administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from abroad to Chinese chipmakers, two sources familiar with the matter said. the case to Reuters.
Microsoft (NASDAQ:) fell 1% after booking huge AI-related expenses. Meta (NASDAQ:) rose 5% after the bell as earnings beat market expectations. Apple (NASDAQ:) and Amazon.com (NASDAQ:), which report earnings on Thursday, closed 1.5% and 2.9% higher, respectively.
On the NYSE, advancing issues outnumbered declining issues by a ratio of 2.23 to 1. On the Nasdaq, 2,603 stocks rose and 1,648 fell, while advancing issues outnumbered declining ones by 1.58 to 1.
The S&P 500 posted 68 new highs and one new low over the past 52 weeks, while the Nasdaq Composite posted 168 new highs and 104 new lows.
Total volume on US exchanges was 13.3 billion, compared to the 20-day moving average of 13.27 billion.
