U.S. stocks struggled as of midday trading this Wednesday, with major indexes fluctuating as investors weighed economic updates and awaited further clarity on potential Federal Reserve moves. The Dow Jones Industrial Average (^DJI) fell by 0.6%, while the S&P 500 (^GSPC) slipped 0.1%, following recent record highs. The tech-heavy Nasdaq Composite (^IXIC) outperformed, managing a 0.1% gain as the surge in technology stocks continued.
Market Movers:
- Nvidia (NVDA): Shares surged 3.2%, fueled by continued optimism around AI growth. Investors are particularly bullish following a report by Mizuho projecting the AI market could grow nearly sixfold by 2027. Nvidia also saw gains from news that CEO Jensen Huang had finished selling a portion of his shares, signaling confidence in the company’s long-term outlook.
- Micron Technology (MU): The stock climbed 2.1% ahead of its quarterly earnings release, as positive sentiment around its role in the AI chip market boosted expectations. The company's involvement in next-gen memory chips and semiconductor production has drawn attention as demand for AI-related hardware rises.
- Intel (INTC): Intel rose 2.0% after unveiling two new AI chips aimed at revitalizing its data center business. The announcement sparked investor excitement, as Intel competes for a share of the fast-growing AI infrastructure market. Analysts remain cautiously optimistic about Intel’s potential comeback after lagging behind key competitors like Nvidia.
- ExxonMobil (XOM): Exxon shares dropped 1.8%, as crude oil prices slid by over 2%, reflecting investor concerns over waning demand from China despite its recent stimulus efforts. The energy sector as a whole has struggled, as weak global growth forecasts and falling oil prices weigh on sentiment.
- Tesla (TSLA): The electric vehicle maker saw a 1.5% dip, reflecting broader concerns over margin pressure as it engages in aggressive price cuts to boost demand. Additionally, ongoing regulatory scrutiny in key markets like Europe and China continues to challenge Tesla’s growth story
Economic Updates
Investor attention is largely focused on key economic data, including a disappointing report on consumer confidence for September, which revealed a sharper-than-expected drop. The data raised fresh concerns about whether high inflation and rising interest rates are dampening consumer spending, a critical driver of U.S. economic growth.
Meanwhile, the housing market showed some resilience with new home sales for August posting a slight 4.7% drop, better than the forecasted decline of 5.3%. High mortgage rates continue to pressure the housing market, but refinances saw a surprising jump as rates eased slightly, according to MBA data.
Looking Ahead
Markets are also bracing for Thursday's second-quarter GDP revision and Friday’s PCE inflation report, a critical gauge used by the Federal Reserve. Investors will be watching these reports for any signs of weakening economic conditions that could influence the Fed’s next steps on interest rates. Additionally, the Fed’s governor Adriana Kugler is set to speak later today, and her comments may offer more insight into the central bank's future plans for rate cuts.