S&P 500 and Nasdaq Rebound After Three Losing Sessions

Barry Adams
27 Mar, 2024
New York City

Benchmark indexes advanced in Wednesday's trading, and Treasury yields held steady as investors debated the future rate-path outlook. 

Investors are also looking ahead to the release of the price consumption expenditure price index on Friday, an alternative measure of inflation that takes into account customers' behavior to substitute cheaper products. 

The PCE price index generally understates the inflation experienced by consumers by a significant margin. 

The S&P 500 index and the Nasdaq Composite are set to extend monthly and quarterly gains after an artificial intelligence-powered market rally lifted two popular indexes. 

The S&P 500 index has gained 9.1%, and the Nasdaq Composite index has advanced 8.7% as of Tuesday's close.

In March, as of Tuesday's close, the S&P 500 increased 2.1% and the Nasdaq Composite advanced 1.4%. 

Investors have bid up stocks in the hopes that the Federal Reserve is more likely to lower interest rates as early as June after the Federal Reserve maintained its projection to cut interest rates by three times in the year. 

However, investor hopes may be dashed if core inflation, which excludes volatile food and energy prices, stays above 2%. 

Moreover, rising tensions in the Middle East are keeping crude oil prices elevated, and that is keeping goods and services inflation at an elevated pace. 

In addition, wages are still rising at a rate of more than 4% annually, and the pace of wage inflation is inconsistent with the Fed's target rate of 2%. 

Investors' rate-cut hopes may be dented if core inflation stays above 3% and wage inflation stays above 4%, forcing the central bank to keep interest rates higher for longer until the end of the year. 

 

U.S. Indexes and Yields

The S&P 500 index increased 0.6% to 5,232.96, and the Nasdaq Composite rose 0.3% to 16,365.45. 

The yield on 2-year Treasury notes decreased to 4.58%, 10-year Treasury notes inched up to 4.22%, and 30-year Treasury bonds edged down to 4.39%.

WTI crude oil decreased $0.29 to $81.33 a barrel, and natural gas prices decreased 6 cents to $1.72 a thermal unit.

Gold decreased by $13.25 to $2,190.24 an ounce, and silver rose 21 cents to $24.63. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.44.

 

U.S. Stock Movers

GameStop Corp. declined 14.5% to $13.26 after the specialty retailer said fiscal fourth quarter sales declined to $1.8 billion compared to $2.2 billion a year ago. 

The company is battling the industry's shift away from physical games to online games and streaming services with subscription models. 

Net income in the quarter ending on February 3 rose to $63.1 million from $48.2 million, and diluted earnings per share advanced to 21 cents from 16 cents a year ago. 

Merck & Company increased 4% to $130.93 after the U.S. Food and Drug Administration approved the company's drug for the treatment of a lung disease. 

Robinhood Markets advanced 2.9% to $19.85 after the company launched a new credit card for its customer base and offered personal finance services. 

Lands' End soared 12.4% to $10.46 after the apparel retailer reported a wider loss, but quarterly sales were ahead of market expectations. 

Trump Media and Technology Group gained 11.8% to $64.83 and extended gains for the second day after the parent company of social media platform Truth Social made its initial public offering. 

Shockwave Medical soared 3.3% to $326.67 after the medical device company extended gains for the second day in a row on a report that the company was in talks to be acquired by Johnson & Johnson.