Market Analysis

On Wednesday, the S&P 500 and Nasdaq closed higher despite a slowdown in U.S. services industry growth in March, with Federal Reserve Chair Jerome Powell suggesting that an interest rate cut wasn't imminent. Key sectors like energy, materials, and communication services led the gains in the S&P 500.

Powell reiterated the Fed's cautious stance, emphasizing a wait-and-see approach regarding rate cuts due to the economy's strength and recent inflation data. The Institute for Supply Management's report showed a decline in non-manufacturing PMI for March, indicating a slower expansion in the services industry, which constitutes a significant portion of the economy.

Market sentiment was influenced by the Fed's stance, with expectations for a rate cut being pushed further into the future. The Dow Jones Industrial Average slipped slightly, while the S&P 500 and Nasdaq edged higher.

Atlanta Fed President Raphael Bostic suggested that rate cuts might not happen until the fourth quarter of the year. The market reacted to mixed signals, with strong economic data creating uncertainty about the timing of rate cuts.

Among the notable decliners were Ulta Beauty and Intel. Ulta Beauty's stock dropped following a downbeat forecast at an industry conference, while Intel disclosed larger-than-expected operating losses for its foundry business in 2023.

Overall trading volume was slightly lower than the 20-day average. Advancing issues slightly outnumbered declining ones on both the NYSE and Nasdaq. The S&P 500 and Nasdaq saw new highs, while there were also new lows recorded.

Paraphrasing text from "Investing" all rights reserved by the original author.