Stock market today: Live updates
Traders work on the floor of the New York Stock Exchange.
Brendan Mcdermid | Reuters
The S&P 500 hit a record high Tuesday as the market awaited the Federal Reserve’s key interest rate cut decision.
The broad market index was last up 0.4% at the 5,650 level, after earlier touching a new record high of 5,670.81. The Nasdaq Composite gained 0.7%, and the Dow Jones Industrial Average advanced 103 points, or 0.3%. The 30-stock Dow also reached a fresh all-time high.
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S&P 500 in 2024
The S&P 500’s move to an all-time high comes during a historically tough period for the market. September has been the worst month for the benchmark over the last 10 years, averaging a 1.3% monthly loss, according to FactSet data.
Traders also overcame late-summer headwinds stemming from concerns over the health of the U.S. economy. Disappointing jobs and manufacturing data in August sparked a large one-day sell-off. However, equities were able to rebound thanks to more constructive data releases and expectations of the Fed lowering rates.
Wall Street is on standby for the Fed’s long-anticipated rate cut Wednesday afternoon, a move that could help boost earnings growth for companies following a backdrop of steep borrowing costs and high inflation. The Fed first embarked on its aggressive hiking campaign in March 2022.
The latest retail sales data indicated solid consumer health. Retail sales rose 0.1% in August versus economists’ estimates for a 0.2% decline, according to Dow Jones. Excluding autos, the number also came in at a 0.1% increase, which slightly missed the 0.2% consensus forecast.
While investors expect a cut Wednesday, the market is divided on the size of the potential reduction. Traders are currently pricing in a 59% chance that the central bank eases rates by 50 basis points, according to CME Group’s Fed Watch tool. That’s up from a roughly 47% chance Friday, but slightly lower from the 67% earlier forecasted on Tuesday. One basis point equals 0.01%.
A steeper rate cut may spark concerns about the health of the economy, according to some investors.
“A 50 basis point cut may further imply a downgrade of the Fed’s view on the labor market — that would be more of a concerning sign,” said Adam Turnquist, chief technical strategist at LPL Financial. “I think there’s going to be a pretty big deviation between what the market is expecting, and what the Fed is going to project.”
Microsoft rose 1% after the tech giant hiked its quarterly dividend by 10.7% to 83 cents per share. The company also approved a $60 billion buyback program. Intel shares jumped more than 6% after the company said it plans to make its foundry business a subsidiary. The Biden administration also awarded the company up to $3 billion in funding through the Chips Act.
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