NEW YORK (AP) — Stocks rose on Wall Street Wednesday as more U.S. companies turn in their latest quarterly reports and several economic updates shed some light on the U.S. economy.
The S&P 500 rose 0.8%. The Dow Jones Industrial Average rose 289 points, or 0.6%, as of 2:44 p.m. Eastern time. The Nasdaq composite rose 1.2%.
The gains were broad and marked a reversal from the prior day’s dip. Nearly every sector within the S&P 500 gained ground and the index recovered a majority of its losses from Tuesday.
Big technology stocks once again led the broader market. Nvidia rose 1.3% and Google’s parent, Alphabet, jumped 2.1%. Their huge values give them outsized influence over the market. Retailers and financial firms also helped lift the market.
Company earnings and forecasts were once again a big focus for Wall Street, with results coming from a broad spectrum of industries.
McDonald’s rose 2.7% after reporting that its sales benefited from the return of its popular Snack Wraps in the third quarter. International Flavors & Fragrances jumped 6.5% after beating Wall Street’s latest quarterly profit forecasts.
On the losing side, Taser maker Axon Enterprise slumped 9.4% after forecasting weaker profits than analysts were expecting. Live Nation Entertainment fell 8.2% after its latest results fell short of analysts’ forecasts.
The latest round of earnings offers Wall Street a source of information on consumers, businesses and the economy that is otherwise lacking amid the government shutdown. Important monthly updates on inflation and employment have ceased, leaving investors, economists and the Federal Reserve without a fuller picture of the economy.
There are still several informative private economic updates that Wall Street can review.
A monthly report from ADP showed that private payrolls rose more than expected in October. The report offers a partial glimpse into the job market, which has been generally weakening and raising broader concerns about economic growth.
The services sector, which is the largest part of the U.S. economy, expanded in October more than Wall Street expected, according to the Institute for Supply Management. The report shows that while overall business activity grew, employment was still contracting.
“The survey provides a reassuring sign that economic growth persisted in October despite the government shutdown,” Bill Adams, chief economist for Comerica Bank, wrote in a note to investors.
A weaker job market remains a big concern for the Fed. The central bank cut its benchmark rate for the second time this year at its most recent meeting, in part to help bolster the economy amid a weakening job market. Lower interest rates can make a wide range of loans and credit less expensive, potentially promoting economic growth. But, lower rates can also add fuel to inflation, which could stunt economic growth.
Fed Chair Jerome Powell and several other Fed officials have expressed concerns about more rate cuts, as inflation remains stubbornly above the central bank’s target of 2%. Consumer prices rose 3% in September.
The mix of a weaker job market and hot inflation leaves the Fed in a tough position.
“For Fed watchers, this ADP report should make it clear that a December rate cut is now in play,” said Jamie Cox, managing partner for Harris Financial Group, in a note to investors. “We are nearing stall speed in the labor market, and that will get the Fed’s attention.”
Wall Street has tempered its expectations for another interest rate cut in December. Investors are now forecasting a 63% chance that the Fed will cut interest rates, according to CME FedWatch. That’s down from a 90% chance just prior to the previous rate cut.
The threat of tariffs also continues to hang over consumers and businesses. President Donald Trump’s trade war with China, Canada and many other nations has been unpredictable. The full impact of higher prices is difficult to forecast because of constant shifts in policy. The U.S. Supreme Court is hearing arguments Wednesday about the legality of the sweeping tariffs.
Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.16% from 4.09% late Tuesday. The yield on the two-year Treasury rose to 3.63% from 3.58% late Tuesday.
European markets gained ground and Asian markets closed mostly lower.
President Donald Trump said he has decided to lower his combined tariff rates on imports of Chinese goods to 47% after talks with Chinese leader Xi Jinping on curbing fentanyl trafficking.
The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated. The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed’s 2% target. Compounding its challenges, the central bank is navigating without much of the economic data it typically relies on from the government. The Fed has signaled it may reduce its key rate again in December but the data drought raises the uncertainty around its next moves. Fed Chair Jerome Powell told reporters that there were “strongly differing views” at the central bank's policy meeting about to proceed going forward.
The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring. A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%. Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case.
Stocks are rallying toward more records ahead of a week packed with potentially market-moving events. The S&P 500 rose 1% Monday. The Dow Jones Industrial Average added 224 points, and the Nasdaq composite jumped 1.7%. Stocks also climbed in Asia ahead of a meeting on Thursday between the heads of the United States and China. The hope is that the talks could clear rising tensions between the world’s two largest economies. This upcoming week will feature profit reports from some of Wall Street's most influential companies and a meeting by the Federal Reserve on interest rates. Gold fell back toward $4,000 per ounce.
U.S. and Chinese officials say a trade deal between the world’s two largest economies is drawing closer. The sides have reached an initial consensus for President Donald Trump and Chinese leader Xi Jinping to aim to finalize during their high-stakes meeting Thursday in South Korea. Any agreement would be a relief to international markets. Trump's treasury secretary says discussions with China yielded preliminary agreements to stop the precursor chemicals for fentanyl from coming into the United States. Scott Bessent also says Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earth elements needed for advanced technologies.
Some seniors say the Social Security Administration's cost-of-living adjustment won’t help much in their ability to pay for their daily expenses. The agency announced Friday the annual cost-of-living adjustment will go up by 2.8% in 2026, translating to an average increase of more than $56 for retirees every month. Eighty-year-old Florence, South Carolina, resident Linda Deas says it does not match the current "affordability crisis.” The benefits increase will go into effect for Social Security recipients beginning in January. Friday’s announcement was meant to be made last week but was delayed because of the federal government shutdown. Recipients got a 2.5% COLA boost in 2025 and a 3.2% increase in 2024.
Wall Street is heading for records after an update said U.S. households are feeling a bit less pain from inflation than feared. The S&P 500 climbed 1% Friday and was on track to top its all-time high set earlier this month. The Dow Jones Industrial Average jumped 529 points, and the Nasdaq composite rose 1.3%. Both are also heading toward records. The inflation data could clear the way for the Federal Reserve to keep cutting interest rates in hopes of helping the slowing job market. A strong earnings reports from Ford Motor and continued gains for AI stars also drove stocks higher.
Federal Reserve Chair Jerome Powell says that a sharp slowdown in hiring poses a growing risk to the U.S. economy.
Three researchers who probed the process of business innovation have won the Nobel memorial prize in economics for explaining how new products and inventions promote economic growth and human welfare, even as they leave older companies in the dust.
U.S. stocks are rising and recovering some of their sell-off from Friday. The S&P 500 climbed 1.6%.
