S&P 500 and Nasdaq Rise as Fed Hints at Rate Cut
- S&P 500 and Nasdaq closed higher following Fed minutes hinting at a rate cut in September.
- Investors' hopes for a decrease in rates were bolstered by the central bank.
- The stock market reacted positively to the indication of potential rate adjustments by the Fed.
American Express shares experienced a notable decline of over 3% in afternoon trading, positioning the company as the worst performer in the Dow Jones Industrial Average. If this trend continues, it would mark the company's most significant drop since August 22, 2023, when shares plummeted more than 14%. However, the stock rebounded later in the day, rising over 6%, as analysts expressed optimism regarding growth expectations and the Federal Reserve's anticipated interest rate cuts beginning in September. In contrast, TJX Companies has seen a remarkable surge, with its shares climbing more than 28% in 2024. This increase follows the release of nonfarm payroll revisions data, which could prompt the Federal Reserve to consider a more substantial interest rate cut in the upcoming month, according to Jeffrey Roach, chief economist for LPL Financial. Meanwhile, the broader S&P 500 index saw a modest increase of 0.2%, while the Russell 2000 index has faced a decline of over 3% in August. The technology sector also showed resilience, with shares rising more than 11% in morning trading. The S&P 500 sector was up by 0.5% during midday trading, reflecting a generally positive market sentiment. Stocks opened higher on Wednesday, with TJX shares gaining over 3% after exceeding earnings expectations and raising its full-year guidance. Additionally, Arch Resources and Consol Energy stocks rose by more than 3% and 4%, respectively, while Target shares surged nearly 14% in premarket trading following strong second-quarter results that surpassed market expectations.