Wall St gains as Fed minutes, jobs data cement rate-cut expectations
Fed's July minutes bolster Sept rate cut hopes
Target jumps after lifting FY profit forecast
JD.com slides after Walmart sells $3.74 bln stake
Labor Dept issues biggest downward benchmark payrolls revision since Great Recession
Indexes: Dow down 0.03%, S&P 500 up 0.36%, Nasdaq up 0.51%
Updates to 2:09 p.m. EDT
By Stephen Culp
NEW YORK, Aug 21 (Reuters) -U.S. stocks inched higher on Wednesday amid range-bound trading after investors parsed a steep downward revision in payrolls, and the release of the minutes from the most recent meeting of the Federal Reserve cemented expectations for a September rate cut.
The S&P 500 and the Nasdaq were in positive territory amid choppy trading, with the Nasdaq out front. The blue-chip Dow was essentially unchanged.
The Fed released minutes from its most recent monetary policy meeting in July, at which members of the Federal Open Market Committee elected to keep the key interest rate unchanged.
The July meeting occurred before the disappointing employment report for that month and a host of economic reports pointing to cooling inflation and a softening but resilient economy.
Even so, the minutes suggest Fed officials were already strongly leaning toward a rate cut at the meeting scheduled for September.
They also set the stage for the Jackson Hole Economic Symposium to convene on Thursday, where Fed Chair Jerome Powell will speak on Friday.
"(The minutes) set us up for Powell’s speech on Friday, which won’t tell us exactly what’s going to happen at the September meeting, but it will give us a framework," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "The other thing the market will be listening for in his speech is the balance between inflation and the labor market."
In economic news, the Labor Department released its preliminary benchmark revision to payrolls data for the 12 months through March 2024.
The revision lowered the 2.9 million payroll adds originally reported by 818,000. It was the steepest preliminary downward revision since the global financial crisis, and suggested that the apparent softening in the labor market could be more pronounced than previously assumed.
"The good news is it was directionally consistent with expectations," Haworth added. "And it supports the narrative the market has been building, that the labor market is softening and the Fed will need to start cutting rates."
At 2:08 p.m. EDT, the Dow Jones Industrial Average .DJI rose 10.54 points, or 0.03%, to 40,845.51, the S&P 500 .SPX gained 20.25 points, or 0.36%, to 5,617.37 and the Nasdaq Composite .IXIC added 90.64 points, or 0.51%, to 17,907.58.
Among the 11 major sectors of the S&P 500, consumer discretionary shares .SPLRCD were enjoying the largest percentage gains, while financials .SPSY lagged.
Target TGT.N raised its 2024 profit forecast and posted its first quarterly increase in same-store sales in over a year, sending the retailer's stock surging 12.6%.
TJX Cos TJX.N rose 6.3% after the discount retailer lifted its annual profit forecast.
Macy's M.N lowered its annual net sales forecast, sending shares of the department store chain sliding 12.0%.
U.S.-listed shares of Chinese e-commerce firm JD.com JD.O dropped 5.3% after Walmart WMT.N, the company's biggest shareholder, has sold its stake in the firm.
Ford Motor F.N announced it was shaking up its electric vehicle plans. Its stock rose 1.2% following the announcement.
Advancing issues outnumbered declining ones on the NYSE by a 2.96-to-1 ratio; on Nasdaq, a 2.21-to-1 ratio favored advancers.
The S&P 500 posted 42 new 52-week highs and one new low; the Nasdaq Composite recorded 72 new highs and 59 new lows.
Preliminary benchmark payroll revision https://reut.rs/4dIsPKG
Reporting by Stephen Culp in New York
Additional reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru
Editing by Matthew Lewis
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
