Technology companies led the way higher, outweighing declines in communication services and other sectors.
“Saying this is the most important stock in the world is an understatement,” said Jay Woods, chief global strategist at Freedom Capital Markets. “The stock’s average move after an earnings release is plus or minus 7.4%, so just an average move will make an impact on the entire market.”
The stocks have been mostly in the red so far this quarter amid worries that AI is going to make software creation much easier at the expense of big software companies’ competitive edge.
Shares in several companies rose after they reported quarterly results that topped analysts’ forecasts. Department store chain Kohl’s vaulted 24% and database platform company MongoDB surged 38%. Both companies also raised their full-year guidance.
Among other stocks that lost ground: doughnut shop chain Krispy Kreme, which fell 3.5%, and Paramount Skydance, which dropped 6.5% for the biggest decline among S&P 500 companies.
Treasury yields mostly fell in the bond market. The yield on the 10-year Treasury slipped to 4.24% from 4.26% late Tuesday.
Crude oil prices rose. European markets finished mostly lower and Asian markets closed mixed overnight.
Trump has been feuding with the central bank over its cautious interest rate policy. The Fed has held rates steady since late 2024 over worries that Trump’s unpredictable tariff policies will reignite inflation. Trump has also threatened to fire Fed Chair Jerome Powell, often taunting him with name-calling. Still, he is only one of 12 votes that decides interest rate policy.
For now, the situation isn’t expected to have a major impact on the Fed’s near-term policy.
The two-year Treasury yield, which closely tracks expectations for Federal Reserve action, dropped to 3.62% from 3.68%.
“It’s kind of a foregone conclusion from the market that we’re going to get the September interest rate cut,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “The bigger question is probably ‘What’s after that?’ ”
The Federal Reserve cut its benchmark interest rate in late 2024 after spending the last several years fighting rising inflation by raising rates. It managed to mostly tame inflation and avoided having those higher rates stall economic growth, thanks largely to strong consumer spending and a resilient job market.
The Fed hit the pause button heading into 2025 over concerns that higher tariffs imposed by Trump could reignite inflation. Lower interest rates make borrowing easier, helping to spur more investment and spending, but that could also potentially fuel inflation. However, concerns are deepening over the jobs market.
Economic data is relatively light this week until Friday, which will bring another update on inflation: the U.S. personal consumption expenditures index. Economists expect it to show that inflation remained at about 2.9% in July, compared with a year ago. Businesses have been warning investors and consumers about higher costs and prices because of tariffs.
All told, the S&P 500 rose 15.46 points to 6,481.40. The Dow added 147.16 points to 45,565.23, and the Nasdaq climbed 45.87 points to 21,590.14.
