US stocks experienced a somewhat muted trading day on Wednesday as investors processed remarks from Federal Reserve Chair Kevin Warsh and new manufacturing data. Warsh, speaking at a central bankers' panel in Sintra, Portugal, stated that inflation expectations and inflation risks have decreased in recent weeks. His comments, while not giving forward guidance, implied the Fed might be less inclined to raise interest rates, which offered some relief to markets. Prior to his remarks, the yield on the 10-year Treasury had pulled back from near 4.50% to 4.47%.
The market's overall gains were broad, with two-thirds of S&P 500 stocks climbing. The S&P 500 largely recovered from an early dip to remain mostly unchanged. The Dow Jones Industrial Average rose 57 points, or 0.1%, while the Nasdaq composite saw a slight decline of 0.3%. This mixed performance was attributed to the robust performance of some companies, such as General Mills which surged 7.8% after reporting better-than-expected quarterly results and announcing a $3 billion cost-cutting plan over four years. Nike also rebounded, gaining 2.3% after posting a stronger profit than anticipated.
However, the market's upside was significantly capped by declines in influential technology stocks, particularly those that had previously benefited from the AI euphoria. Micron Technology dropped 9.6%, Nvidia slipped 0.9%, and Applied Materials fell 11.1%. These declines reflect ongoing investor concerns that these stocks may have become overvalued. The Institute for Supply Management's manufacturing survey indicated continued growth but at a slower pace than economists expected, alongside a deceleration in price increases, further impacting market sentiment.
In commodities, oil prices eased amidst hopes of a resolution between the United States and Iran, potentially reopening the Strait of Hormuz. Brent crude, the international benchmark, fell 2.1% to $71.40 per barrel. Conversely, gold saw a notable jump, rising 1.1% to settle at $4,082.40 per ounce, as yields softened following the weaker-than-expected manufacturing report. The dollar index also saw a slight increase of 0.13%.
