The US markets took a breather on Wednesday, closing mixed after two days of strong gains. The Nasdaq gained 61 points, the S&P 500 was mostly flat, and the Dow fell 106 points.
As investors monitored the fragile truce between Israel and Iran and paid attention to testimony from the Federal Reserve's chairman, economic data and corporate results showed signs of caution.
Markets Pause After a Two-Day Rally
Wall Street showed restraint on Wednesday after two days of strong gains. The Nasdaq Composite added 61.02 points, or 0.31%, to settle at 19,973.55. The S&P 500 was flat,falling only 0.02 of a point to close at 6,092.16. The Dow Jones Industrial Average fell 106.59 points, or 0.25%, to end at 42,982.43.
Tech stocks lifted the Nasdaq, but the Dow trailed. Investors also monitored the unstable cease-fire between Israel and Iran. President Trump declared success, but the situation between the United States and Iran remained uncertain. Oil prices were steady, and a cautious tone characterized the overall market.
Powell Echoes Fed Patience, Cut Odds Unchanged
Federal Reserve Chairman Jerome Powell, on the second day of his testimony, told the Senate that the Federal Reserve can be patient in considering rates. He told Congress more time was required to gauge the inflationary effects of tariffs. Markets are still pricing in roughly a 25% chance of a rate cut at the July 30 meeting and a 67% chance by September.
New home sales fell 13.7% earlier in the day, according to housing data.Mortgage applications were also down as rates moved higher. Investors are now in wait-and-see mode ahead of Thursday's Q1 GDP update and Friday's PCE report, both of which are likely to provide additional clarity about inflation and consumer spending.
Corporate Moves and Stock Trends
Among the biggest stocks, Nvidia reached a record high and became the world's most valuable company by market value, at $3.75 trillion. Tesla dropped 3.8%, as European sales dropped for the fifth month. FedEx dropped 3.3% after it issued a weak profit forecast, and UPS shed 1.2%. General Mills fell 5.1% after its outlook for profits disappointed investors. But shares of BlackBerry surged 12.5% on better revenue forecasts. Micron jumped more than 5% in after-hours trading on robust Q4 guidance.
Stock trends showed weakness. Declining issues outnumbered advancing ones on the NYSE by almost 2 to 1. The Nasdaq had 2,859 stocks falling and 1,566 rising. On the NYSE, there were 174 new highs and 69 lows, and on the Nasdaq, 86 highs and 65 lows. Volume on U.S. exchanges reached 16.02 billion shares, slightly below the 20-day average of 18.08 billion.
