The S&P 500 and Nasdaq rose on Wednesday as statistics showed U.S. services industry growth slowed in March, but Federal Reserve Chair Jerome Powell said a rate cut was still unlikely.
Most major S&P 500 sectors advanced, led by energy (.SPNY), materials (.SPLRCM), and communication services (.SPLRCL). Powell stated in a speech on Wednesday that the Fed will continue to wait and see when to drop rates, given the strong U.S. economy and recent higher-than-expected inflation figures.
According to a Reuters survey, non-manufacturing PMI fell for the second straight month to 51.4 in March, down from 52.6 in February, and worse than economists predicted. A rating above 50 implies growth in the services industry, which makes up more than two-thirds of the GDP, and the U.S. economy is still growing moderately.
It's all about the Fed and market expectations for a rate cut being delayed. This has been weighing on the market for at least two days, "said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
The Dow Jones Industrial Average (.DJI) dipped 43.1 points, or 0.11%, to 39,127.14, the S&P 500 (.SPX) gained 5.68 points, or 0.11%, to 5,211.49, and the Nasdaq Composite (.IXIC) rose 37.01 points, or 0.23%, to 16,277.46.
The Wall Street entrance to the New York Stock Exchange (NYSE) in New York City. File photo purchase licensing rights, opens new tab The U.S. central bank was expected to cut rates in June, but recent strong economic data has analysts doubting it.
Ulta Beauty (ULTA.O), opens new tab fell 15.3% after giving a disappointing industry conference forecast. E.l.f. Beauty (ELF.N) and Coty (COTY.N) shares declined.
After Intel (INTC.O) reported $7 billion in operational losses for its foundry division in 2023, up from $5.2 billion the year before, shares fell 8.2%. U.S. exchanges traded 11.03 billion shares, compared to 11.76 billion for the full session during the past 20 trading days. Advancers outweighed decliners 1.66-to-1 on the NYSE and 1.25-to-1 on Nasdaq.
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