S&P 500 as investors rotate ahead of expected government reopening
S&P 500 edged higher Wednesday as investors rotated out of tech and into blue-chip names ahead of the confirmation of a deal to end the longest-ever federal government shutdown.
At 12:43 AM ET (17:43 GMT), the Dow Jones Industrial Average gained 414 points, or 0.9%, the S&P 500 rose 0.1%, and the NASDAQ Composite fell 0.3%.
Government reopening to see data releases
Lawmakers in the U.S. House of Representatives are likely to vote this week on a compromise which would end an historically-long government shutdown.
Hopes that the government will soon reopen were bolstered earlier this week, when the U.S. Senate approved a bill to secure federal funding for most agencies until January 30.
The bill will now head to the House of Representatives, where the body’s Republican majority means the body is likely to approve the bill, before President Donald Trump signs it into law.
For financial markets, reopening the government would mean the return of several official economic indicators, including a monthly jobs report, which have been delayed by the shutdown. These data points are crucial because they help investors and policymakers alike assess the state of the U.S. economy.
The data blackout has made the path ahead for Federal Reserve interest rates particularly murky, leaving the outcome of the central bank’s final monetary policy meeting in December largely uncertain.
According to the Wall Street Journal, Fed members remain divided on whether to cut rates at the gathering, after having slashed borrowing costs by 25 points at prior two meetings in October and September.
Markets are pricing in a 61.9% chance for a 25 basis point cut in the Fed’s December 10-11 meeting, up from 57.8% yesterday, CME Fedwatch showed.
Cisco due to report
On the earnings calendar, markets will be keeping close tabs on results from networking gear provider Cisco Systems (NASDAQ:CSCO) after the closing bell.
Cisco has faced a solid backdrop in recent months, underpinned by the surge in enthusiasm for AI, which has fueled soaring hyperscale cloud investments and driven IT infrastructure financing.
Circle Internet Group Inc (NYSE:CRCL) fell more than 10% even as the company reproted quarterly results that topped Wall Street estimates.
Elsewhere, Advanced Micro Devices (NASDAQ:AMD) stock rose after the chipmaker unveiled long-term growth targets at its first financial analyst day in three years.
Chevron (NYSE:CVX) stock gained after the oil major said it plans to grow free cash flow by more than 10% annually through 2030 and increase oil and gas production, while further reducing costs and capital expenditure.
Alphabet (NASDAQ:GOOGL) stock rose after the tech giant said that it will invest €5.5 billion euros ($6.41 billion) in Germany in the coming years in a push to expand its infrastructure and data centre capacity in Europe’s largest economy.