All three major U.S. stock indexes closed at record highs on Wednesday, fueled by a strong rally in technology shares and encouraging comments from Federal Reserve Chair Jerome Powell. Salesforce’s positive earnings report and upbeat market sentiment contributed to the surge, while Powell’s remarks on the economy provided an additional boost.
Speaking at a New York Times event, Powell highlighted that the economy has shown more strength than anticipated when the Federal Reserve began cutting interest rates in September. This resilience, coupled with progress on inflation, could lead to a more cautious approach to further rate reductions. His optimism, alongside findings in the Fed’s Beige Book, set an encouraging tone for the market.
The Beige Book, a summary of economic surveys across the U.S., indicated that economic activity has expanded modestly in most regions since October. Peter Cardillo, chief market economist at Spartan Capital Securities, said Powell’s upbeat comments and the Beige Book findings reinforced positive sentiment. “Powell was very upbeat about the economy, and he said we’re making progress on inflation… that’s good news for stocks in general,” Cardillo noted.
Investors are now looking ahead to the Federal Reserve’s December 17-18 meeting, where a third consecutive interest rate cut is widely anticipated.
Salesforce led the technology sector with a strong performance, hitting an all-time intraday high after exceeding third-quarter revenue estimates and raising its annual revenue forecast. Other cloud and chipmaker stocks followed suit, pushing the S&P 500 technology index to a record high. Marvell Technology also surged after issuing a bullish fourth-quarter revenue forecast.
By the end of the day, the S&P 500 gained 36.63 points, or 0.61%, closing at 6,086.51. The Nasdaq Composite added 251.96 points, or 1.29%, to end at 19,732.87. The Dow Jones Industrial Average rose 310.72 points, or 0.70%, finishing at 45,011.90.
Investors are now focused on upcoming economic data. Thursday’s jobless claims report and Friday’s monthly jobs data are expected to provide further insights into the labor market. Early reports showed a modest increase in U.S. private payrolls for November, while the Institute for Supply Management’s services sector survey indicated a slowdown in activity following recent gains.
Sam Stovall, chief investment strategist at CFRA Research, remarked on the significance of Friday’s employment report, calling it “the granddaddy of employment reports this week.” The report is expected to solidify expectations for the Fed’s next move on interest rates.
With strong market performance and positive economic indicators, the focus remains on how the Federal Reserve’s actions will shape the outlook for stocks in the coming months.
