U.S. stock indices were mostly higher on Wednesday, following a rally in the technology industry led by market favorite Nvidia.
Wall Street experienced fluctuations on Tuesday, with the S&P 500 up 0.4% and the NASDAQ Composite up 1.3%, ending three days of declines, boosted by a rebound in Nvidia shares.
In contrast, the 30-stock Dow Jones index lost nearly 300 points, or 0.8%.
Nvidia’s rebound boosts Wall Street
Hopes were buoyed by a rebound in Nvidia (NVDA), the poster child of artificial intelligence, which rose nearly 7% on Tuesday to recover from three consecutive days of sharp losses, driven by profit-taking and growing uncertainties regarding demand for artificial intelligence.
The stock’s rise extended to its chipmaker competitors and helped boost Wall Street indexes in the face of losses in other sectors.
However, economically sensitive sectors remain weak in anticipation of this week’s PCE price index data.
This indicator is the Fed’s favorite inflation gauge and is likely to influence the central bank’s decision on cutting interest rates.
The Fed revised its forecast for rate cuts this year from three to one. But markets are confident that the Fed will make at least one 25 basis point cut in September, with further cuts also expected by the end of the year.
Fedex rises on optimistic estimates
Optimism from logistics and delivery giant FedEx (FDX), which rebounded 13% in pre-market trading, also helped investor sentiment.
FedEx, which views its results as a barometer of the state of the global economy, announced that it expects to post full-year revenue growth in the low to mid-single digits. Analysts were forecasting a 3% increase.
It also announced plans to repurchase $2.5 billion worth of shares in the current fiscal year.
Separately, Rivian Automotive (RIVN) rallied nearly 40% following the creation of a joint venture with Volkswagen(VOWG), in which the German automaker will make an initial $1 billion investment in the electric vehicle maker.
Early Wednesday, quarterly results from General Mills (GIS) and Paychex (PAYX) will be released, followed later by Micron Technology (MU).
Crude oil prices rise despite U.S. stockpile rebound
Oil prices rose on Wednesday, despite an unexpected rise in U.S. stockpiles, as investors weighed potential geopolitical risks and confidence heading into the summer driving season.
Data from the American Petroleum Institute, released Tuesday, indicated that U.S. crude inventories rose about 0.9 million barrels for the week ending June 21.
It came as a surprise, as a drawdown of 3 million barrels was expected, although investors are overlooking this as they anticipate a drawdown in inventories during the peak demand season in the third quarter. Final figures from the Energy Information Administration will be released later this week.
