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Highlights:
- Market Decline: US markets closed mostly lower as profit-taking followed earlier record highs, with fading optimism over China’s stimulus measures.
- Key Indices: The Dow and S&P 500 dipped, while Nasdaq stayed nearly flat, reflecting mixed investor sentiment.
- Stock Movements: Microsoft gained despite competition concerns, chipmakers performed well, but GM and Ford declined after downgrades from Morgan Stanley.
US markets ended mostly lower on Wednesday, following a surge in profit-taking after record highs seen earlier in the week on both the Dow and S&P 500. Optimism surrounding stimulus measures in China faded, leading to a pullback.
The Dow Jones dropped 0.7% to close at 41,914.75, retreating from its all-time high of 42,208.22 achieved on Tuesday. The S&P 500 dipped by 0.2%, ending at 5,722.26, slightly down from 5,732.93 the previous session. Meanwhile, the Nasdaq finished the day nearly flat, gaining 0.04% to settle at 18,082.21.
Global markets had rallied earlier after China’s central bank, the People’s Bank of China (PBoC), rolled out a comprehensive stimulus package aimed at revitalizing the country’s economy. This included cuts to reserve requirements and adjustments to lending rates, particularly targeting existing home loans. However, even with additional stimulus measures announced midweek—such as the largest rate cut on one-year loans to financial institutions—this was not enough to sustain the previous day’s gains.
Attention in the market is shifting toward upcoming speeches from several Federal Reserve officials on Thursday, including Chair Jerome Powell, who will be speaking at the US Treasury Market Conference. While Powell is not expected to provide new policy updates, market participants will be looking for any clues on the Fed’s future stance following last week’s aggressive 50-basis-point rate cut.
Wednesday saw limited economic data releases, with the housing market drawing attention. Mortgage applications surged by 11% in the week ending September 20, continuing the positive momentum from the previous week’s 14.2% increase. This pushed application volumes to their highest levels in more than two years. However, new home sales slipped by 4.7% in August, totaling 716,000, down from July's revised figure of 751,000.
In terms of stock movements, Microsoft shares gained despite being accused by Google of using restrictive licensing practices to limit competition in Europe. Meanwhile, chipmakers such as Micron Technology, Nvidia, and Intel performed well, with Micron rising ahead of its earnings report.
Elsewhere, US-listed shares of Flutter Entertainment surged by 5%, following the company’s announcement of a $5 billion share buyback program and positive profit outlook. On the other hand, both General Motors and Ford saw declines after Morgan Stanley downgraded both companies, citing new challenges for the automotive giants.
