US Stock Market Today: S&P 500 Rises 0.2% & NASDAQ Jumps 0.5% Amid Earnings Optimism and Expectations of Fed Rate Cut

US stocks advanced modestly on Wednesday as investors awaited the Federal Reserve’s latest policy decision and a series of major technology earnings. The S&P 500 rose 0.2% by midday in New York, while the NASDAQ 100 added 0.5% and the Dow Jones Industrial Average climbed 0.5%. 

Traders widely expected the Fed to cut interest rates by a quarter-point, marking the second rate cut of the year. Some expect Chair Jerome Powell to adopt a cautious tone, emphasizing risk management amid slowing economic growth and ongoing inflationary pressures. The potential end of the Fed’s balance sheet reduction also encouraged a more optimistic outlook on liquidity.

In the bond market, the 10-year Treasury yield increased by two basis points to 3.99%, and the two-year yield rose by one basis point to 3.50%. The Bloomberg Dollar Spot Index was little changed. Gold climbed 1.1% to $3,995.41 an ounce, and West Texas Intermediate crude rose 1.2% to $60.88 per barrel.

Technology Sector Strength and Market Breadth Concerns

Technology stocks continued to drive the overall market. The Bloomberg Magnificent 7 Index increased by 0.6%, reflecting continued enthusiasm for AI-driven growth. However, even with record highs for the S&P 500, more than 300 of its stocks declined, indicating weaker market breadth.

Analysts observed that concentrated gains in large-cap technology companies could lead to increased volatility. Craig Johnson of Piper Sandler and Dan Wantrobski at Janney Montgomery Scott warned of the possible risk of short-term pullbacks from overbought conditions. Still, most strategists expect AI-related investment and easing monetary policy to support valuations in the near term.

The S&P 500 has now traded above its 50-day moving average for 125 sessions, the longest stretch since 2011. After a 38% climb since April, investors face the choice of realizing profits or staying invested as the Fed begins its rate-cutting cycle.

Global and Currency Market Developments

In Europe, the Stoxx 600 declined 0.1%, while the MSCI World Index edged up 0.1%. The euro strengthened 0.1% to $1.1664, the Japanese yen gained 0.1% to 151.92 per dollar, and the British pound slipped 0.2% to $1.3243.

Positive sentiment extended to Asia after US President Donald Trump and South Korean President Lee Jae Myung finalized a trade agreement, concluding months of negotiations. The deal improved investor confidence in regional trade prospects.

Corporate Earnings and Market Movers

• NVIDIA Corp. became the first company to reach a $5 trillion market capitalization, rising 3.5% as optimism around artificial intelligence persisted.

• Caterpillar Inc. surged nearly 13% after reporting stronger-than-expected earnings and robust demand from AI-related data centers.

• Boeing Co. dropped over 4% following a $4.9 billion accounting charge and a delay of its 777X jetliner debut to 2027.

• Fiserv Inc. fell sharply after cutting its full-year profit forecast and releasing weaker-than-expected third-quarter results.

• Verizon Communications Inc. gained revenue and profit under its new CEO’s growth strategy.

• CVS Health Corp. lifted its 2025 profit outlook for the third time in six months, signaling progress under CEO David Joyner.

• Paramount Skydance Corp. began laying off 1,000 employees as part of a $2 billion cost-cutting plan following its merger with Skydance Media.

• Thermo Fisher Scientific Inc. agreed to purchase Clario Holdings Inc., a clinical trial software company, for about $8.9 billion in cash.

• UBS Group AG reported solid earnings but failed to ease investor concerns over Credit Suisse bond risks and regulatory reforms.

• Deutsche Bank AG exceeded forecasts for fixed-income trading, strengthening CEO Christian Sewing’s position ahead of a strategic update.

• Caterpillar, CVS, and Verizon were among the day’s strongest performers, while Boeing and Fiserv weighed on the Dow.

As markets awaited earnings from Microsoft, Alphabet, and Meta later in the day, investors focused on updates regarding artificial intelligence spending and expected returns on those investments.

Also Read: Stock Market Update: Nifty 50 and Sensex Poised for Positive Start Amid US-China Trade Optimism