Wall Street mixed as investors await Fed rate clues, data

By Johann M Cherian and Purvi Agarwal

(Reuters) - Wall Street's main indexes were mixed on Wednesday, with the S&P 500 hovering near record highs, as investors awaited more indicators on the state of the economy and upcoming interest rate reductions.

The main indexes are set for monthly gains helped by a rally sparked by the Federal Reserve's start to its policy relaxation cycle last week that raised expectations for a soft landing. However, a weak consumer sentiment report on Tuesday fanned some concerns about the health of the labor market.

At 9:56 a.m., the Dow Jones Industrial Average fell 93.00 points, or 0.22%, to 42,115.22, the S&P 500 gained 3.09 points, or 0.05%, to 5,736.02 and the Nasdaq Composite gained 37.27 points, or 0.21%, to 18,111.79.

Eight out of the 11 S&P 500 sectors trended higher with defensive sectors such as utilities and consumer staples among top gainers. On the flip side, energy stocks sank to the bottom with a 0.9% loss.

Rate-sensitive stocks traded mixed. Nvidia (NASDAQ:NVDA ) gained 2.2%, while Apple (NASDAQ:AAPL ) slipped 0.4%. Sales of foreign-branded smartphones, including iPhones, in China fell in August on an annual basis, data from a government-affiliated research firm showed.

The yield on long-term Treasury bonds ticked higher on worries that looser financial conditions could re-ignite inflation. [US/]

Odds of a 50 basis point cut by the central bank at its November meeting have ticked up to 59.5%, from a coin toss earlier in the week, as per the CME Group's (NASDAQ:CME ) FedWatch Tool.

"For now the data suggests we're in a soft landing scenario. But I wouldn't be surprised if the data changes quickly. Then the Fed is going to have to get more or less aggressive in cutting rates," said Adam Sarhan, chief executive officer of 50 Park Investments.

The S&P 500 and the Nasdaq are up about 20% so far this year on rate cut expectations and optimism around artificial intelligence. However, the S&P 500 is trading at valuations high above longterm averages.

Data showed new home sales for August stood at 0.716 million, compared to estimates of 0.7 million as per economists polled by Reuters.

However, the next test for markets will be weekly jobless claims and personal consumption expenditure data for August due later in the week.

Remarks from Fed Governor Adriana Kugler, due after markets close, will also be parsed. But the spotlight will remain on Chair Jerome Powell's speech at the New York Treasury Market Conference on Thursday.

Among major movers, KB Home (NYSE:KBH ) fell 4.4% after the homebuilder missed Wall Street expectations for third-quarter profit, weighing on the housing index that lost 1%.

Hewlett Packard Enterprise (NYSE:HPE ) topped the S&P 500 with a 5.6% gain after Barclays upgraded the server maker's stock to "overweight" from "equal-weight".

Ford (NYSE:F ) lost 4.8% and General Motors (NYSE:GM ) fell 6% to bottom the benchmark index after Morgan Stanley cut its rating on the automakers.

The stocks weighed on the consumer discretionary sector that dipped 0.6%.



Declining issues outnumbered advancers by a 1.5-to-1 ratio on the NYSE and by a 1.62-to-1 ratio on the Nasdaq.

The S&P 500 posted 32 new 52-week highs and one new low, while the Nasdaq Composite recorded 35 new highs and 35 new lows.

Source: Investing.com