S&P 500, Nasdaq close slightly up after soft services sector data; Fed comments…..
The S&P 500 and Nasdaq ended slightly up on Wednesday after data showing the U.S. services industry growth slowed further in March, while comments by Federal Reserve Chair Jerome Powell that focused on the need for more debate and data before interest rates are cut limited the advance. Most of the major S&P 500 sectors advanced, led by materials <.SPLRCM> and energy <.SPNY>.
Powell reaffirmed in a speech on Wednesday that the Fed will stick to its wait-and-see approach as it considers when to start cutting rates given the continued strength of the U.S. economy and recent higher-than-expected inflation data. Earlier on Wednesday, data from the Institute for Supply Management showed that non-manufacturing PMI declined for the second straight month to 51.4 in March, down from 52.6 in February, and weaker than analysts had expected, according to a Reuters poll. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy, and the data still indicates the U.S. economy continues to expand, though at a moderate pace.
According to preliminary data, the S&P 500 <.SPX> gained 5.68 points, or 0.13%, to end at 5,211 points, while the Nasdaq Composite <.IXIC> gained 37.27 points, or 0.22%, to 16,277.46. The Dow Jones Industrial Average <.DJI> fell 43.10 points, or 0.09%, to 39,135.85. Traders were pricing in a 57% chance the Fed will cut interest rates by 25 basis points in June, according to CME Group’s Fed Watch tool, down from about 64% a week ago. In separate comments to CNBC on Wednesday, Atlanta Fed President Raphael Bostic said rates should likely not be reduced until the fourth quarter of this year.
Among decliners, ULTA Beauty dropped after the beauty retailer gave downbeat forecast at an industry conference. Shares of e.l.f. Beauty and Coty also fell. Also, Intel shares dropped after the chipmaker disclosed $7 billion in operating losses for its foundry business in 2023, steeper than the $5.2 billion reported the year before.
Reporting by Chibuike Oguh in New York; additional reporting by Caroline Valetkevitch in New York and reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Aurora Ellis.
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