On Wednesday, U.S. stock indexes hovered near record highs, continuing a trend of subdued trading over recent days.
The S&P 500 remained virtually unchanged in morning trading, following its latest all-time high. The Dow Jones Industrial Average was similarly flat, slipping 20 points, or less than 0.1%, as of 10:45 a.m. Eastern time. Meanwhile, the Nasdaq composite edged up by 0.1% from its latest record.
Target’s shares tumbled 7.4% after the retailer’s quarterly profit fell short of analysts’ expectations. Additionally, its profit forecasts for the upcoming quarters were below analysts’ estimates, citing reduced consumer spending on non-essentials. Earlier this week, Target announced price cuts on thousands of everyday items to attract customers coping with persistent inflation.
Lululemon Athletica dropped 6.7% after announcing that its chief product officer, Sun Choe, will leave the company this month to pursue another opportunity. The company also revealed a new organizational structure that will not replace the chief product officer role.
On the positive side, Petco Health & Wellness saw a 31.8% surge after reporting better-than-expected quarterly results and revenue. TJX, the off-price retailer behind TJ Maxx and Marshalls, rose 6.9% after exceeding profit expectations and raising its full-year earnings per share forecast, attributing success to its attractive pricing.
The day’s most anticipated profit report is from Nvidia, expected after market close. Analysts predict another strong quarter driven by high demand for AI-related chips. Nvidia’s stock, now the third largest on Wall Street, plays a crucial role in sustaining the market’s AI-driven enthusiasm.
In the bond market, Treasury yields rose ahead of the afternoon release of the Federal Reserve’s last meeting minutes. Recent reports indicating easing inflation and economic softening have sparked hopes for a potential rate cut this year. However, Fed officials have stated that more consistent data showing improvement is needed before considering a rate cut.
High interest rates have increased costs for credit cards, auto loans, and mortgages. A report on Wednesday showed a sharper-than-expected decline in sales of previously occupied homes last month.
Globally, central banks appear eager to cut interest rates, but may proceed cautiously due to strong economic performance and persistent inflation, according to Athanasios Vamvakidis, a strategist at Bank of America. He anticipates only shallow rate cuts, possibly delayed beyond current market forecasts.
The yield on the 10-year Treasury increased to 4.43% from 4.41% late Tuesday.
Internationally, stock indexes were modestly lower across Europe and Asia. London’s FTSE 100 dropped 0.8% following a stronger-than-expected inflation report from the U.K. Office for National Statistics, which dampened hopes for a June rate cut. Tokyo’s Nikkei 225 also fell 0.8% after Japan reported an increase in its trade deficit last month.
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