By Amruta Khandekar and Shristi Achar A
Wall Street's main indexes rose on Wednesday, helped by bets that the Federal Reserve had reached the end of its rate hikes and a slide in longer-dated Treasury yields, while traders assessed the latest batch of economic data.
U.S. equities have bounced back in November, with the S&P 500 coming within a whisker of its highest level this year, as signs of easing inflation boosted bets that the Fed was done with its interest rate hikes.
However, minutes from the latest Fed meeting on Tuesday showing policymakers' cautious approach towards monetary policy weighed on optimism around the prospects of a rate cut early next year.
Data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, though the labor market continued to slow, fueling hopes of a soft landing, according to analysts. Meanwhile, durable goods posted a bigger-than-expected drop of 5.4% in October.
The yield on the benchmark 10-year Treasury note slipped to 4.4061%.
A fall in energy prices and the ten-year yield are helping drive markets higher, said Art Hogan, chief market strategist at B Riley Wealth.
""We've already started to see (a year end-rally). The three headwinds were higher energy prices, higher Treasury yields and a stronger dollar and for the last three weeks, all of those headwinds now become tailwinds," said Hogan.
Traders have nearly fully priced in the likelihood of the Fed keeping interest rates unchanged in December, with about 29% betting on chances of a rate cut as soon as March, according to the CME Group's Fedwatch tool.
Crude prices tumbled over 4% as OPEC+ producers unexpectedly delayed a meeting on output, with the S&P 500 energy sub-index 1.4% down, lagging all other sectors. [O/R]
Nvidia, the last of the megacap names to report quarterly results, forecast overall revenue above Wall Street targets, but warned U.S. export curbs could lead to a steep drop in fourth-quarter sales in China.
Shares of the AI chip leader slid 3.0%.
Investors also watched the latest turn of events at OpenAI after the ChatGPT maker reached an agreement for Sam Altman to return as CEO days after his ouster. Shares of the startup's financial backer Microsoft edged 0.8% higher.
Light trading volumes also impacted market moves ahead of the Thanksgiving holiday on Thursday.
At 10:01 a.m. ET, the Dow Jones Industrial Average was up 87.71 points, or 0.25%, at 35,176.00, the S&P 500 was up 11.00 points, or 0.24%, at 4,549.19, and the Nasdaq Composite was up 50.87 points, or 0.36%, at 14,250.85.
Among other major movers, Deere & Co shed 6.0% after the farm equipment maker forecast 2024 profit below analysts' estimates as high borrowing costs and squeezed budgets dented demand. Peer Caterpillar also fell 2.3%.
Advancing issues outnumbered decliners by a 2.31-to-1 ratio on the NYSE and by a 2.24-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and one new low, while the Nasdaq recorded 54 new highs and 40 new lows.
(Reporting by Amruta Khandekar and Shristi Achar A; Editing by Maju Samuel)
